rogerk2

3x ETFs: Using Leverage For Higher Returns

Regarding a series of 35% crashes (3 x 35% = 105%) -- the 3X ETF wouldn't ever reach zero. Say it's $10. A 35% loss would rebalance the price to $6.50 the next day. Another 35% loss would get rebalanced to $4.23. Another 35% loss would take it to $2.75, and so forth. Since today's price is a percentage increase or decrease based on yesterday's price, it could get close to zero but would never actually reach it.

FAS and FAZ have had lots of 30% and 40% daily moves, which is why they are so popular with daytraders and often have the highest daily volume on the exchanges. Play them with extreme caution. The professional traders have access to market-moving information before you do, they have enough money to manipulate any stock they want to, and they can trade before and after your markets open/close. If you play against them, you lose.