Friday, February 6, 2009

Quirks of Levered ETF's

I saw this video posted on another blog I frequent. For those of you that play the levered ETF's that aren't already aware of some of their quirks over the long term, you'll be interested to hear what's in the video. Levered ETF's (SDS, SSO, QID, QLD, SKF, etc...) have been a godsend for day traders. Most of them have good liquidity and 2x or 3x the daily returns of whatever index/sector they track, making them superb trading vehicles. However, when you look longer term the returns don't match up the way you would expect.