Opinions
Keith Richards
VelocityShares 3x Long Crude ETN linked to the S&P GSC
UWTI-N
DON'T BUY
Apr 20, 2015
$3.410
Stock price when the opinion was issued
E.T.F.'s
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The problem with leveraged ETF’s is that they are actually reset every day. If the stock market moved up and down 10% every day, and a $10 share went up 3 times in a single day, it means it went up 30% and your $10 turns into $13. Next day it falls 10%. That means your $13 times 10% times 3 is going to fall to something like $9.60. The next day it goes back up 10%, but you are only at about $11.50. Your big swings by the day, because of re-balancing, are all over the map.