Bid/offer came from LSE, as I wrote.
Very slow, something like 5 minutes per grid box.
The price I can make a case for, but not the instant profit!
iād stay well away from these, i was looking at one asset, maybe Tesla or something, and both the 3xlong and the 3xshort were near all time lows haha how does that work? Well it does work from volatility decay, compounding and fees but still hard to get head around that both directions lose in long holdings
Have you downloaded and scoured the documents?
Did you understand it?
From time to time they readjust - check to see what that means.
But thatās not a problem
Google it if you didnāt understand the document
If the price is rising you mustnāt stick with a +ve multiplier, and vice versa.
qqqx5 has done well recently because qqq has pretty consistently gone up.
The % change you get is say 3x the percentage change in the base stock.
The reference is the previous day, not the day that you bought it.
If a stock drops 10% in a day, it has to rise 11% to get back to where it was. OK, no biggie.
BUT
EG1
Day 0, end
. . . Tesla is 100 ___T3 is 100
Day1 end, T is +20%, T3 is therefore +60%
. . . Tesla is 120 ___T3 is 160
Day2 end, T is +20%, T3 is therefore +60%
. . . Tesla is 144 ___T3 is 256
Day 3 end, T is +20%, T3 is therefore +60%
. . . Tesla 172,8 ____T3 is 409
= Happy.
.
.
EG 2 by the daysā¦
Tesla is 100 Tesla x3 is 100
Tesla drops 20%,
Tesla is 80 ___ Tesla x3 is 40 __ (= 100 -60%)
Tesla drops 20%
Tesla is 64 ___Tesla x3 is 16 ___(= 40 -60% )
Tesla drops by 20%
Tesla is 51.2 ____Tesla x 3 is 6.4 ____(= 16 -60%)
= Not happy
You now need a rise to get you back to where you started.
For Tesla itās about a 100% rise ____for Tesla x 3 itās about 1500%.
If thereās consistent rise theyāre bloody marvellous, and can take a hit of a little , now and again.
This is an excellent example.
Indeed you need underlying stock to be performing consistently. Then the leverage product will run a lot as well. Otherwise itās a disaster
I made a mistake/omission.
Normal sort of daily drop, say 1%, leaves you with 3x at Ā£97.
1% rise the next day would take you back to 99.91
If your stock goes down 100 to 90, then itās only needing + 11% for the base stock, correct
But For the 3x stock, youāre down to at 70%, so need a 42.8% rise, which would be a 14.3% rise back at the original stock!
If you look at qqq5, over the past 3 or 6 months, it did really wellā¦
Great
But the total has really dropped off since qqq has dipped. Something like 190% instead of 230.
You really need to sell the thing if thereās a couple of daysā loss. Then youād be smiling. Thereās no -qqq5, but there is a -3x S&P 500.
The obvious danger right now is that we might get a (finger in the air) 20% market crash, which would leave you at 40% and a very long way backā¦ Ouch!
NB Low maximum positions on some of these, eg 3BLR (oil) is Ā£2500 