OT: Stock and Investment Talk
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Over-leverage in a bear market is not prudent for shorts because of the vicious bear market rallies.
On the flip side if you believe the bottom is in and over-leverage to maximize your upside, you can be setting yourself up for disaster.
That being said, no one knows how much leverage is being used by an individual on this board. Some can be at 5%-10% of their portfolios on 3X ETF’s, Some can be at 20% (yikes).
I have limitations, but If I wanted leverage for a big move (say down) my choice would be something like SPX puts and be willing to ride them to $0 or intended target (say 3600).
On the flip side if you believe the bottom is in and over-leverage to maximize your upside, you can be setting yourself up for disaster.
That being said, no one knows how much leverage is being used by an individual on this board. Some can be at 5%-10% of their portfolios on 3X ETF’s, Some can be at 20% (yikes).
I have limitations, but If I wanted leverage for a big move (say down) my choice would be something like SPX puts and be willing to ride them to $0 or intended target (say 3600).
For those that want to short something, these ETFs are a good option since you don't need to worry about margin accounts or short squeezes. I have never shorted something in my life and don't plan to, but it seems like a good tool to use for those plays.
On the long side, these ETFs are great for low risk, high rewards plays. Low risk as in, you don't need to commit too much money for the possible reward.
not disagreeing with anything u wrote..
just- the most recent discussion here- is on recent market uptick in leverage in 0DTE and the potential for exponential down-triggers with hedging on cash covered Puts.. which is an entirely different animal.
I wouldn't suggest anyone get into this market... just raising it as potential risk to watch...
double or triple bear (or bull) ETFs are always a great way to take advantage of market volatility - if you feel it's where you want to be..
Low risk? If you bought SPLX at the high (hypothetically) right now you would be down 48%. If you would have simply bought SPX instead you would be down 14%. Simplistic example, but what do you mean by low risk?
Talking about absolute value of the risk. When you can easily catch a 4-5x rally or even more, you don't need to risk too much up front. I'm sticking to broad index or sector leverage plays. I already doubled up twice using SOXL. Looking really good on a few other plays including UWM which is the 2x Russell 2K. These broad indexes will all hit new highs. Don't know when, but they all will. So, if you have the stomach and patience, it's a sure thing.
The target for any inverse leveraged ETF such as SH or SPUX is a one-day return. Right? That's the math behind the fund. "Playing" them any other way (longer hold duration) is inviting a loss, perhaps a sizeable one at that.
Yes, the 2x or 3x (or inverses) are for one day. If the S&P 500 goes up 10% over several months that doesn't mean UPRO will be up 30% (or the reverse). The math is different. I have a spreadsheet of 20 years of data analysis on the performance of 2x and 3x ETFs. I focused on how these behave during extreme market moves.
The drop was unnatural and due to Elon goes nuts with Twitter and selling $40B of TSLA stock. That's over, so the stock is going back to its previous position.
Not complicated.
Highly correlated to BTC/crypto. Expected the run up following BTC move.
Totally agree with @Goo. No one really knows any single persons level of investment into these leveraged ETFs or stocks. I only respect investors who post their trades in real time. I have been doing this long enough and know way too many folks that claim to buy at or near the bottom and peacock when the market rises. Beware of who you believe on these sites.
+1
Lots of bears claimed going cash throughout the year after big drops happened. Not many people give details like us.
I definitely posted what I am doing in the moment many times. Obviously, not all. Can't posted all the time, no matter how much I enjoy this thread! I also mentioned levels were I would buy in the future.
Oh, okay. I would think that in order to claim that you have doubled your investment in SOXL and UVM without the use of options, you would post your exact trades soon after they happen. These are ETFs that not many view as investment vehicles but are rather seen as trading vehicles. Claiming that you doubled your investment when those ETFs have doubled from their 52 week lows requires impeccable timing and therefore raises doubt. Not many people are that good with their timing, right?
Didn't double UWM. Converted my position in VB to UWM in early October at $29. Recently got to $40'ish, but pulled back a bit. Will hold UWM until the Russell 2000 gets back to ATH and then will return to VB. I mentioned this trade many times.
Doubled SOXL over the summer and recently bought again at $9'ish during the holiday break. It doubled and I made a stop loss to preserve 90% return, which was triggered soon after. Also make 3 other SOXL plays with little success (lost ~10% on those).
So 2 good timings with SOXL and 3 bad! :)
My largest leverage positions are TQQQ and the above mentioned UWM. I was going to convert VOO to SSO in October if it hit $34.5, but it just missed.
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The best thing about this thread is its longevity. I was bored a few days ago and decided to look 1 year back to see what everyone was talking about. Basically the conversation hasn't changed much.
Thanks for the update. You have amazing timing and can really pick the bottoms and tops for that matter. With those skills, you should be trading more than investing. If I had your skills to call the tops and bottoms at that high accuracy, I would already be at my goal of the tres commas club.
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If you think being right 40% of the time is amazing, not sure what to say. I have limited context. I think the power of these ETFs rule the day if you are patient. I got into LABU at $6.19 a several weeks ago (12/27 to be exact). Biotech has a long history of going on crazy runs. LABU can rip for a long, long time if I have the stomach to wait.
We shall see!
Don’t be modest. 40% accuracy sure, but the you lost only 10% on your losses and made 90% gains on your wins. That is amazing. Don’t sell yourself short.
Ironically, I screwed the pooch in October when SOXL was at its lows. I bought SOXL in the high $6's, but it kept dropping during after hours. Got cold feet and dumped. It ripped to $14 within a few weeks. So, I didn't lose much, but.....LOL! I guess that experience prepared me for the recent SOXL play.
Simple principle, if the play starts going down, sell. If it starts going up and is in the green, hold.
UBER is finally flexing their muscles in the space. They seem to be on the path of profitability by Q4.
Many more EV choices in the market in 2023. TSLA had to cut its prices. They badly need redesigns for all of their models. And my Lucid get more battery range than a majority of TSLA models.
If someone likes this space, how could anyone buy LYFT instead of UBER? The former is losing more money each Q and the latter is closing in on profitability (likely Q4).
Worm Capital: The Tesla Decade
Eric Markowitz | Director of Research, Partner, Worm Capital Cameron Tierney | Research Analyst, Worm Capital
https://static1.squarespace.com/sta...e+Tesla+Decade+-+Worm+Capital+-+4-18-2022.pdf
Eric Markowitz | Director of Research, Partner, Worm Capital Cameron Tierney | Research Analyst, Worm Capital
https://static1.squarespace.com/sta...e+Tesla+Decade+-+Worm+Capital+-+4-18-2022.pdf
I just received a letter for a Lyft class action lawsuit from when I traded the company during the IPO in 2019.
FYI, sold YINN after hours for $53.3. Bought in late Dec at $45'ish. 18-19% gain, but was up way, way more. Just think politics may push these stocks lower. Love to hear your thoughts on China.
Like the broken clock, Tom Lee will eventually be right. (Just having some fun, he has a good record, junt not in 2022). And I hope he’s right this time, but I’m not sure how we get there. Most of America is tapped out and high interest rates are impacting the remainder. I think we will continue to bounce around for the next year, which will create opportunities for traders.
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