01-13-2015, 11:51 AM
My experience with leveraged silver ETFs suggests:
1) They are very risky. They seem to pretty consistently follow commodity prices DOWN but not necessarily UP. Reading suggests that they reflect price changes that occur during regular trading hours but not changes that occur outside of hours. e.g., if silver closes at 30 and opens at 35, this change won't be reflected in the leveraged ETF.
2) They lose value if you hold them long term, probably for the above reason. You should really be day trading them and trying to anticipate the daily moves, i.e., you are a wizard or a time traveler.
The NON-leveraged silver ETF seems to much more closely match the price of silver (ditto for gold). It's the leveraged one that's fubar.
I dunno if oil is the same though.
1) They are very risky. They seem to pretty consistently follow commodity prices DOWN but not necessarily UP. Reading suggests that they reflect price changes that occur during regular trading hours but not changes that occur outside of hours. e.g., if silver closes at 30 and opens at 35, this change won't be reflected in the leveraged ETF.
2) They lose value if you hold them long term, probably for the above reason. You should really be day trading them and trying to anticipate the daily moves, i.e., you are a wizard or a time traveler.
The NON-leveraged silver ETF seems to much more closely match the price of silver (ditto for gold). It's the leveraged one that's fubar.
I dunno if oil is the same though.