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11/2/2022 4:30:06 PM
Posted: 6/13/2022 8:26:22 AM EST
[Last Edit: JamPo]
On 3x leveraged etf on the s&p. Is it as simple 3x%. An example would be, as of now the s&p is 3900. Let’s say it drops 20% to 3120. The leveraged etf is trading at 38.37. Do I subtract 60% from the current price?

S&P 3900 - 20% = 3120
ETF 38.73 - 60% = 15.49

Right or wrong? Correct calculation appreciated.

ETA: Yes..it checks out against todays drop.
missing
Link Posted: 6/13/2022 8:35:53 PM EST
[#1]
Link Posted: 6/14/2022 12:17:25 PM EST
[#2]
Understood.
Link Posted: 6/16/2022 8:34:16 PM EST
[#3]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LuckyDucky:
Wrong.

The 3x etfs reset the leverage daily.

As a result, longer-term gains can be greater than 3x and longer-term losses can be less than 3x.

However, whipsaws are worse.
View Quote

Can you elaborate on the whipsaw's being worse?
Link Posted: 6/17/2022 12:09:07 AM EST
[#4]
Link Posted: 6/18/2022 3:59:51 PM EST
[#5]
They are good for day trading
Link Posted: 6/19/2022 5:09:19 AM EST
[#6]
Got it. So good for a day trade but bad for a hold in volatile markets like now, even if you believe in an overall direction?
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