What about ultra long ETF's are these bad news as the ultra short ETF's ?
Answers
4085 points
EthanR answered 10 months ago …
By "bad news", I think you may be referring to James Cramer's recent rants against the financial sector double long ETF. I don't see most double ETF's as bad. I have been trading both QLD and QID for some time now, and doing well with both. But I wouldn't hold either one for the long term, they are simply trading vehicles.
There are just too many "good" double ETF's, both long and short, so I think careful research is, as always, essential to a trader or investor.
109 points
terranboxer answered 10 months ago …
As Ethan mentioned, you must also define what 'bad news' is. I've been trading a number of Ultra long and Ultra short ETFs with good gains. The key point is - duration of holding these ETFs.
Keep in mind that as the time period lengthens, the gains also deteriorate as these ETFs state that they give 200% of the index they cover.
I trade my ETFs at the beginning of the week and close positions by end of the week. Till date, barring one unfortunate pair trade, i've been a happy camper :).
115 points
YankeeDoodle answered 9 months ago …
They seem to work reasonably well on paper, but it is worth some research into the one you are holding before you jump in. I bought FAZ as a hedge, and have to say, it seems to trade irradically. There seem to be some other good 2x ETF however, the inverse ETF don't seem to track as well as the positively correlated ones.
I suggest checking them out before you buy on a site like this one: http://stockcharts.com/charts/performance/perf.html?SDS,RSW,SSO,RSU,$SPX
2222 points
readytoretire answered 9 months ago …
The main thing on double or triple ETFs is not to stay too long. Due to simple math, (and the fact that they typically settle every day), over time they don't end up with the double or triple that they aim for. On a daily basis, they do work, but on a long term basis, stay away.
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