Why Does Cramer Have a Beef with Leveraged ETFs? [View article]
If someone could answer this question for me, I would appreciate it. Aren't the prices of leveraged instruments like SDS/SSO derived from the underlying index (for example, the S&P 500)? If they are DERIVED from the price of an index, how can buying or selling the leveraged instruments effect the price of the underlying index? It doesn't make sense. They are either dependent on the index (which I believe to be true), or they are independent of the index (which doesn't make sense, but that is what people like Cramer seem to be saying.)
UltraShort ETFs: At a Tipping Point? [View article]
Did you know that DIG/DUG have no relationship to XLE? Yeah, it's true. Read the prospectus (hmmm... a little research maybe?) and you'll find out that they are based on IYE, the iShares Dow Jones US Energy index.
On Nov 15 10:30 AM HaavBline wrote:
> Some of the ProShare UltraShorts seem to have failed dramatically > to track its index. Complare charts of XLE, DIG, and DUG, and you > will see what I meant. > > DUG seems to have failed miserably to track XLE trends since early > October. I saw this pattern in some other Double Shorts ETFs also. > What's going on?
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Why Does Cramer Have a Beef with Leveraged ETFs? [View article]
Aren't the prices of leveraged instruments like SDS/SSO derived from the underlying index (for example, the S&P 500)? If they are DERIVED from the price of an index, how can buying or selling the leveraged instruments effect the price of the underlying index? It doesn't make sense. They are either dependent on the index (which I believe to be true), or they are independent of the index (which doesn't make sense, but that is what people like Cramer seem to be saying.)
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On Nov 15 10:30 AM HaavBline wrote:
> Some of the ProShare UltraShorts seem to have failed dramatically
> to track its index. Complare charts of XLE, DIG, and DUG, and you
> will see what I meant.
>
> DUG seems to have failed miserably to track XLE trends since early
> October. I saw this pattern in some other Double Shorts ETFs also.
> What's going on?