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SPXU Is Back In Negative Drift And Inflation Is An Additional Drag


  • Leveraged ETFs behavior may not be what you expect.
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The ProShares UltraPro Short S&P 500 ETF (NYSEARCA:SPXU) is one of the most popular instruments to short the broad market for trading or hedging purposes. However, its daily -3X leverage factor is a source of drift. It must

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This article was written by

Fred Piard profile picture

Fred Piard, PhD. is a quantitative analyst and IT professional with over 30 years of experience working in technology. He is the author of three books and has been investing in data-driven systematic strategies since 2010.

Fred runs the investing group Quantitative Risk & Value where he shares a portfolio invested in quality dividend stocks, and companies at the forefront of tech innovation. Fred also supplies market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XBI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

bruceporter5 profile picture
It’s 12/6/22 and YTD my accounts are up 98% using SPXU and SPXL as (non-option) straddles. Love these ETF’s for short-term swing trades.
hugh74jones profile picture
Buy SPXU shares on weakness**. Your position can serve as a hedge against a falling market. Even a couple hundred shares or more, can add gains when sold during market declines. (**) also, you can sell uncovered puts in SPXU, with chance to acquire (on assignment), or at least make a few bucks on your sale premium at option expiration dates.
kjseagle1 profile picture
@hugh74jones SPXU showing weakness-- and spiking our interest...im liking that chart :)
kjseagle1 profile picture
good article on SPXU...
TMV has soared over the past few weeks, as has my holding TTT, which you don't track.
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