Can you explain what is 3 LTS? If Tesla goes up from 400- 500usd, what will happen to 3 LTS? Is the money locked in for certain period of time or additional charges?
3LTS means 3xLong Tesla. This is basically like buying 3 shares instead of 1, but is based on exposure. So if you only had say $150, you could get exposure to 1 whole share of TSLA.
So in your example of owning 1 share from 400-500. 3LTS would see a $300 gain instead of the normal $100. This also works the same in reverse if you lose money. However, the 3 times leverage that you get only works for 1 trading day. It will slowly return less and less than 3 times the return the longer you hold it.
Edit: Yes there are additional charges. There is an ongoing annual fee of 1.7% that granite shares charge. This is taken from your profits, or added to your loss. Has nothing to do with T212.
Great. Thanks Nick. That’s very helpful. So can buy and sell next day when I made the gain? I am thinking of buying 5 shares of 3LTS as TSLA is definitely going up. Also, does the increase or decrease based on last closing position or current premarket value?
Yeah, you can sell at anytime. I believe Graniteshares, the ETP provider of 3LTS reccomend it only being held for 1 day I believe. I’ve been holding for some weeks now, basically since after battery day. I sold TSLA stock to buy 3LTS. Didn’t really work out, and just held. Looking good today though!
Current premarket value. The valuation is a little annoying becuase 3LTS is traded on the LSE. So closes early and you can’t take advantage of normal day price action in America. There is only like a 2 and a half hour window where both markets are open simultanously. However it can work to your advantage like today. I can sell now and take advantage of the pre-market prices and take a tidy profit. However, I think $500 is on the table. I might sell some, I don’t know yet.
Just be careful when using leverage/margin. It can lose you money really fast. It’s not really too different from using a CFD where 70-80% of people lose money. It’s safer though because the leverage is 3x not 5x and there is little risk of getting a margin call. (Unless you were short RR) There was a massive problem where people lost alot of money playing with something they didn’t understand not too long ago. Have a search around on the forum.
If you never did that and are thinking that it’s easy money, please read a epic post about RR and GraniteShares.
If you are experienced investor, just ignore me
Note of caution particuarly with 3x on a volatile stock.
If at ANY TIME within the trade of a product, the underlieing share (in this case Tesla) goes -34% with respect to the opening price you lose EVERYTHING.
It automatically closes the position and it’s the end of it.
Really, nobody should be doing what I’m doing.
I signed up for volatility back in June/July and that’s what I’m getting:
I am definitely the former and inexperienced. Do you have a link to the epic post? Thanks for your help
Thanks for the details Nick. It is very much appreciated.
I moved everything to it’s own thread as it had little to do with S&P500 inclusion…
Gosh… that’s scary! People lost money in ) digits! Looks like I may need to stay away from this!!
Just to stress @EquityInvestor s point, it does not matter if it fell to that value for 1 millisecond in intraday timeline, it is gone.
Most leveraged ETN providers put “stop loss” orders to prevent this, but I think this makes it even more dangerous on volatile stocks.
A rumour on the tradefloor affecting shareprice 10-15% for may be less than 10 minutes will trigger these “stop losses” and you’ll end up with a permanent 30-45% loss.
Leveraged products come with more intrinsic risk and should be used carefully (if at all) after much investigation. It is not as simple as get rich 3x faster
Granite shares can stick it I’ve read the 3x rolls Royce short!!!
Sorry if this is a bit silly or already obvious: since TSLA is up approximately 6% today I take it that means 3LTS should be up 18% tomorrow?
Not by the full 18%, 3LTS already rose by quite abit today. It will open higher tomorrow because TSLA has moved up since the LSE closed.
It’s scary these leveraged things are still being traded
I am so full of regret. I sold my 3LTS on Friday.
did it seem like a good decision at the time? can’t help it if so.
No I was dumb as hell and got scared because making gains always makes anxious. Why the hell would you sell TSLA before the inclusion date. I dunno, just wanting to lock in those margin gains.
I still bought TSLA after selling 3LTS anyway. But still…