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Got my NUGT's back.....
guitarwes
Posts: 9,240 ✭✭✭
Never thought I'd recover from that 1-10 reverse split last October when I got caught with my pants down holding 800 shares at almost $9/share when the price was $2-3.xx at the split. Left me with 80 shares at ~ $90/share. Being young, dumb, and full of I don't care, I let it roll knowing that sooner or later it was bound to bounce back. Closed at $119 today. These 3X ETFs are a wild ride I tell ya. A stupid stupid ride.
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Too many positive BST transactions with too many members to list.
Too many positive BST transactions with too many members to list.
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Never thought I'd recover from that 1-10 reverse split last October when I got caught with my pants down holding 800 shares at almost $9/share when the price was $2-3.xx at the split. Left me with 80 shares at ~ $90/share. Being young, dumb, and full of I don't care, I let it roll knowing that sooner or later it was bound to bounce back. Closed at $119 today. These 3X ETFs are a wild ride I tell ya. A stupid stupid ride.
Splits don't affect your value. What you loose or gain in dollars per share gets offset by number of shares. Reverse splits normally occur to get the price per share back above the minimum price required to keep it listed (last I checked it was $2) on the big boards. They did you a favor.
Takes big ones to hold a 3X leveraged ETF that long. I don't like holding them overnight. In the event metals crash in the overnight markets you can't protect them with a stop limit while the US stock markets are closed. Lot more work to trade them daily, but since Jan. NUGT has been very, very worth it.
Even in a bull market you can play the dips with DUST and make money on the ups and the downs.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Even in a bull market you can play the dips with DUST and make money on the ups and the downs.
I'd like to see that person that was able to ride DUST on/off in 2016 and not get their head handed to them on the volatility (ie a net winner in 2016) on a half a dozen to a dozen trades. DUST from around $15 at the start of 2016 and hit in the $1.30's on Friday. Considering GDX hasn't even doubled in that time, that's a huge amount of decay to have to deal with. DUST has far worse decay that NUGT. And JDST might be the worst of all. On paper, DUST should have dropped by a factor of 1/6.28 (3X the inverse of the GDX rise). That's a non-decay projection of $2.39 for DUST. So in just 4 months, DUST has had a 45% decay.
Since mid-January there's been no realistic trades in DUST...other than to short it, which was probably next to impossible to find the shares to do that. It's been like trying to catch a falling knife most of the time....just like NUGT was in March-June 2013.
DUST horror show
I have made only three trades on DUST this year but could have made more that were also profitable if I were not limited by IRA trading rules imposed by the IRS. My 2016 trading in NUGT and DUST in this one of five IRA accounts shows a net 258% gain so far. Remember, you don't win with every trade, being right more than you are wrong is what churns profit.
My point is that instead of taking a daily loss on a held weekly or monthly winner, why not dump the winner during its down move and trade the inverse move. This is what I mean by trading the ups and the downs.
Being that I am trading IRA accounts, I am limited (IRS settled funds rule) to trading no sooner than every fourth business day while I await the settlement of funds from the last sale. I can buy with these unsettled funds at any time, but am locked into holding the position until the funds settle - not something you should do with a leveraged ETF. Ability to exit at any time is important.
The only good protection one has with leveraged ETFs is a stop limit order. This protection is only good while the US equities market is open, the order expires when the market closes. If a gold ETF is held overnight and gold tanks on the overseas metals markets, the related ETF will open in the US markets much lower than it closed the day before. The gold related ETF position will not be protected by a stop that expired the day before.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Even in a bull market you can play the dips with DUST and make money on the ups and the downs.
I'd like to see that person that was able to ride DUST on/off in 2016 and not get their head handed to them on the volatility (ie a net winner in 2016) on a half a dozen to a dozen trades. DUST from around $15 at the start of 2016 and hit in the $1.30's on Friday. Considering GDX hasn't even doubled in that time, that's a huge amount of decay to have to deal with. DUST has far worse decay that NUGT. And JDST might be the worst of all. On paper, DUST should have dropped by a factor of 1/6.28 (3X the inverse of the GDX rise). That's a non-decay projection of $2.39 for DUST. So in just 4 months, DUST has had a 45% decay.
Since mid-January there's been no realistic trades in DUST...other than to short it, which was probably next to impossible to find the shares to do that. It's been like trying to catch a falling knife most of the time....just like NUGT was in March-June 2013.
DUST horror show
It's called simple mathematics roadrunner, not decay.
Knowledge is the enemy of fear
Even in a bull market you can play the dips with DUST and make money on the ups and the downs.
I'd like to see that person that was able to ride DUST on/off in 2016 and not get their head handed to them on the volatility (ie a net winner in 2016) on a half a dozen to a dozen trades. DUST from around $15 at the start of 2016 and hit in the $1.30's on Friday. Considering GDX hasn't even doubled in that time, that's a huge amount of decay to have to deal with. DUST has far worse decay that NUGT. And JDST might be the worst of all. On paper, DUST should have dropped by a factor of 1/6.28 (3X the inverse of the GDX rise). That's a non-decay projection of $2.39 for DUST. So in just 4 months, DUST has had a 45% decay.
Since mid-January there's been no realistic trades in DUST...other than to short it, which was probably next to impossible to find the shares to do that. It's been like trying to catch a falling knife most of the time....just like NUGT was in March-June 2013.
DUST horror show
It's called simple mathematics roadrunner, not decay.
Actually it is called beta slippage and it is a little more than simple math.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Funny how its called decay when the result is under performance. What is it called when there is over performance as the case with NUGT over the last 3 months?
Its just math.
Knowledge is the enemy of fear
Not sure it's math. Seems more like bragging and whining with good or bad timing.
+1
Not sure it's math. Seems more like bragging and whining with good or bad timing.
That's pretty much the case with my trades.
Too many positive BST transactions with too many members to list.
Its pretty simple to me.
Funny how its called decay when the result is under performance. What is it called when there is over performance as the case with NUGT over the last 3 months?
Its just math.
NUGT, while performing well, is also subject to beta slippage. This "decay" is a result of a leveraged ETF having to adjust its exposure to the underlying ETF (in this case the gold miner ETF, GDX) on a daily basis. After a big move up the leveraged ETF NUGT doesn't have enough exposure supporting it so the fund must buy more gold miners. When the gold miners decline (taking NUGT down with them), then NUGT has too much exposure and has to unload gold miners in order to rebalance.
Everything on Wall Street is just simple math - until it isn't.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Its pretty simple to me.
Funny how its called decay when the result is under performance. What is it called when there is over performance as the case with NUGT over the last 3 months?
Its just math.
NUGT, while performing well, is also subject to beta slippage. This "decay" is a result of a leveraged ETF having to adjust its exposure to the underlying ETF (in this case the gold miner ETF, GDX) on a daily basis. After a big move up the leveraged ETF NUGT doesn't have enough exposure supporting it so the fund must buy more gold miners. When the gold miners decline (taking NUGT down with them), then NUGT has too much exposure and has to unload gold miners in order to rebalance.
Everything on Wall Street is just simple math - until it isn't.
Lol. I love this place. If one can't do simple math, live a simple life. I envy those that can.
Knowledge is the enemy of fear
Loves me some shiny!
NUGT crushed.
buying opportunity, but only at the right time. I expect further decline.
Anyone who moved into a DUST position before 2 p.m. today saw some hefty gains.
selling opportunity ahead.
Stronger economic activity reported for April and FED jawboning June rate increase are puting a damper on metals and miners and boosting dollar index.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Was holding a small tranche of DUST since Monday ($1.29) and sold that into this morning's open for a 29% gain. I couldn't think of selling it yesterday as my brokerage didn't recognize it as a security while it was in the process of doing the 1-10 split. I was hoping for a second tranche around 1.20 Monday but it never came.
Got to remember that on these sharp dips to immediately buy some NUGT when bailing out of DUST. Gold dropped around $45 in a fairly decent 5 wave decline. It was very likely to bounce out of today's pre-OpEx crash. NUGT was good for a quick 15% gain this morning after GDX's $22.80 low. I'll do it better next time.
I still make my money by providing expertise to my customers, but I look forward to the day when I can join you in the casino.
In the meantime, I know what it is that I'm buying, and why I'm buying it.
I knew it would happen.