Their protective actions define daily the extent of likely expected price changes for thousands of stocks and ETFs. Those forecasts are implied by the self-protective behaviors of MMs who must usually put firm capital at temporary risk to balance buyer and seller interests in helping big-money portfolio managers make volume adjustments to multi-billion-dollar portfolios. The dotted diagonal line marks the points of equal upside price change forecasts derived from Market-Maker hedging actions, and the actual worst-case price drawdowns from positions that could have been taken following prior MM forecasts like today’s. Market-average norms are suggested by SPDR S&P500 index ETF ( SPY) at location. The intersection of those coordinates by the numbered positions is identified by the stock symbols in the blue field to the right. Both scales are of percent change from zero to 25%. The tradeoffs here are between near-term upside price gains (green horizontal scale) seen worth protecting against by Market-makers with short positions in each of the stocks, and the prior actual price drawdowns experienced during holdings of those stocks (red vertical scale). The price-change ability built into them tends to offset the passive appeal mistake of ETFs nature to be “bought & held”.įigure 1 is a map of the trade-off between price-created capital loss risk and capital-gain reward prospects for many long-leveraged ETFs. It may be timely, at least competitive in finding opportunity, for there are many dozens of them. Why this article?Ī reader provided the focus on Leveraged Exchange Traded Funds – ETFs, by request. So start now, it won’t wait around for you. In today’s technology-active world you will increasingly need to build your investing resources to meet a longer lifetime’s opportunities and demands. Direxion Daily Technology Bull 3x Shares ( NYSEARCA: TECL) provides that here. The best way to build capital in today’s technology-active world is by ACTIVELY constantly staying alert to price changes and never make forecasts of what may happen beyond the time horizon which can be reliably seen. Follow that PASSIVE approach and you will way too soon outlive your capital. “Sound, long-term conservative investing will avoid most loss-of-capital risks and also avoid most of even the inadequate single-digit-average rewards”.
0 kommentar(er)
