semovente
17 posts
msg #89623
- Ignore semovente |
3/15/2010 3:45:46 PM
Has anyone modified the "rules" for Inverse ETFs?
Thanks in advance,
.vp
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Kevin_in_GA
4,599 posts
msg #89624
- Ignore Kevin_in_GA |
3/15/2010 4:14:58 PM
Since they are for all intents and purposes mirror images of each other, the rules are the same. For me, the decision to buy or sell a specific leveraged ETF is based on the actions of its underlying index, not on the ETF itself.
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sbuck143
88 posts
msg #89697
- Ignore sbuck143 |
3/16/2010 1:32:20 PM
Correct me if I'm wrong, but Inverse ETF's arent really meant to be held long term. They are designed to match the daily performance of an index, and thus are subject to volatility quirks when calculating long term results. Blog post below has some more info.
http://seekingalpha.com/article/112846-the-pitfalls-of-using-inverse-etfs
So keep this in mind with any inverse ETF strategy.
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sbuck143
88 posts
msg #89698
- Ignore sbuck143 |
3/16/2010 1:35:10 PM
Also I'd say, if you want to play against an ETF, the more stable, ' predictable' result would be best obtained by shorting said ETF, instead of buying the inverse / leveraged version.
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semovente
17 posts
msg #89721
- Ignore semovente |
3/16/2010 5:51:46 PM
The one advantage of an Inverse ETF is for the case where one does not want to have a shorting account or in the case of Canadian RRSP accounts which do not permit shorting.
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