Leveraged ETFs

Incredible Chart on Trader Margin Levels and Market Bubble

October 24, 2013

Are we looking at a market bubble here? Take a look at this chart and consider. (click to enlarge) On one hand, I was astounded by the almost perfect correlation between investor margin levels and actual S&P500 Index valuations. It should be a pretty good fit I suppose, assuming people use margin to go long, […]

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Do Leveraged ETFs Create Volatility? No – All ETFs Do

February 19, 2012

Leveraged ETFs are under fire for creating volatility in the stock markets, especially in the last hours of trading. The story goes that traders move through large positions in leveraged exchange-traded funds which then permeate through prices for individual securities. The argument certainly has plenty of merit – leveraged funds do pass on volatility into […]

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Shorting Treasury Options: Profit, Rinse, Repeat

December 6, 2011

Every few months, I’ve been repeating the same pattern of shorting out of the money leveraged ETFs on US Treasuries and keeping the premiums when the options expire.  It’s been a nice way to supplement largely flat market returns with recurring income, and in my view, without taking on an inordinate amount of risk.  Since […]

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Volatility ETNs Soared Last Week…In an UP Market

November 6, 2011

Even though the S&P500 (SPY) closed the week with a respectable 2.4% gain, volatility ETNs (Exchange traded notes) showed huge gains for the week ranging from 19%-40% depending on the type of ETN.  For a bit more on how the volatility index works, the VIX is the CBOE’s market volatility index which derives its volatility […]

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1000 Best and Worst ETFs of 2011

October 19, 2011

With 2011 coming to a close, it’s a good time to take inventory of which ETFs fared the best which may lend some insight into trends and sectors to keep an eye on going into the close of the year.  With tax-loss harvesting, asset rebalancing, and the dreaded annual returns fund managers must report following […]

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Shorting Treasuries For the Ultimate Risk-Takers

September 6, 2011

While there are numerous ways to short Treasuries, there are several different approaches investors choose to take, each suited to a particular strategy and risk tolerance.  What I’m outlining today is both high-risk and highly likely to succeed – IF I can outlast the Fed.  See, I entered into the ultimate risk short today that […]

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30 Top ETFs of 2010

December 29, 2010

The top ETFs of 2010 hail from several different asset classes and strategies.  Since leveraged ETFs tend to benefit tremendously from sustained trends but make for poor long-term investments in volatile markets, I’ve included both conventional non-leveraged ETFs as well as leveraged ETFs.  As of December 30, 2010, here are the best performing ETFs of […]

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How to Short Treasuries: With Yields this Low, Trade of the Century?

October 6, 2010

Treasury Yields continue to drift lower, breaking new records weekly it seems.  Many attribute the current rate to investors baking in a substantial Quantitative Easing measure (dubbed QE2) to the tune of $500 Billion to $1 Trillion, as well as some substantial announcements out of Japan recently on their QE program. Even high yield muni […]

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Worst ETFs of 2010 – You’ll Be Surprised

September 10, 2010

While 2010 has to date been a relatively flat year for the developed market indices and some of the emerging markets are up big, like the Colombia stock market, there has definitely been some volatility in particular sectors like Financials, Real Estate, Bonds and Treasuries.  At first glance, you might expect that the worst performing […]

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