Question about leveraged EFTs So why doesn’t everyone just ...
Question about leveraged EFTs
So why doesn’t everyone just buy the leveraged ETFs like SPXL? Isn’t it the SPY but for every 1% SPY $SPDR S&P 500 ETF(SPY.US$ increases SPXL increases 3%? I feel like I am missing something…..
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Mingyao : Think about compounding interest, 10% +10% doesn't equal to 20%, but rather 21%, same calculation apllies to 3x leverage ETFs as well. Vise versa, compounding loss. A 3x Bull ETF can easily drop 70~99% in a bear market, while the index only dropped 30%+, it's hard to recover if u're holding it from the peak