If you read through the thread excerpted below, please discuss. I'd really be interested in any comments that you have. Have never done anything like this, but jonebize's outline of how he trades NUGT compelled me to start looking into it. Reading your Nuugggeettt thread, I can see some people here could have a thing or two to say about his method. How does it stack up with what you do? If this is the wrong place to post this, please let me know - I don't want to derail your thread. (I've got a list of previous threads and I'm slowly reading through ones like Got my NUGT's back....., so I'm not expecting anyone to repeat what they've already said unless they want to.) Source: This is from comments below a ZeroHedge article (Nov. 25) titled, Gold Options Traders Most Bearish Since July 2015
TLDR: First guy complains he can't stack. Second guy steps up, outlines his trade system using NUGT. Third guy gets his mind blown. Fourth guy cautions caveat emptor. Second guy's post-script to First Guy humbly suggests checking out the NUGT 10-yr chart.
duck dodgers Nov 25, 2016 8:25 PM
Everytime ive tried stacking I ended up running into some kind of financial issues and I had to sell. It sucks because you have to buy at a premium and if you have to sell your lucky to get spot.
jonebize duck dodgers Nov 25, 2016 9:56 PM
Hey bud, I have the flu and feel horrible; I didn't feel like writing you but I'm going to anyway. I get the impression a lot of dudes on ZH have decent incomes and can afford to stack a good hedge outright. I'm not in that position. What some people do on here is trade stocks or options as a means to get more capital to put into physical. I trade options because of the leverage. I'm going to outline how I trade.
I trade the 3x ETF with the ticker symbol NUGT. I trade between 30 and 60 days to expiration, rolling them over to stay in that window of time because it's a good balance of high leverage and acceptable time loss. To decide what call options to buy, I divide the theta (time cost per day) into the price of the contract, going with a strike price where the theta is between around 0.20% and 0.33% of the contract price, meaning you pay 0.20% to 0.33% a day just to hold the call options. In this window of time (30-60 days) and with this theta-percentage, you get leverage of about 2.5x over NUGT.
Bear in mind, NUGT is a 3x ETF of the gold index. What this means is that everytime the gold index goes up by 1%, you make 8%. Because it compounds, there is potential for serious gains. In order to keep the theta-percentage within the range of ~0.20% to 0.33%, I typically sell options and buy new ones when the percentage gets outside of that range. Why? Because I don't want to pay a (much) higher % in time cost, and on the other hand, I don't want to go into super low-percentage thetas, because it would give me less leverage. In other words, I sell my options contracts when the theta-percentage goes too far outside of that range, and I buy new contracts that are within that range. I call this "scaling."
As for the upsides: you're talking about compounding gains here. As a guide, I scale contracts for every 9-10% move up or down in NUGT. A 9% move in NUGT is a pretty typical move for every $10.00 move in the price of gold. Because you get 2.5x leverage over NUGT, every 9% move in NUGT results in a 22.5% move in your NUGT options. To calculate the potential upside to the recent high in NUGT (around $34.50) from today's close ($7.74), open your calculator, and count the number of times you have to multiply $7.74 by 1.09 in order to reach $34.50. I calculated just over 17.
Now, remember that you make 22.5% everytime NUGT moves 9%. If you were to hold options until NUGT reaches $34.50 again, you would make a 22.5% gain the same number of times: 17. Calculated out, $1,000 invested today would result in 31.5x gains, or $31,500. Not a bad stack. Bear in mind that you can lose your shirt, and that you should only risk the amount of money you can live with losing. Also bear in mind that you have to pay commission fees and spreads. Spreads aren't bad on NUGT because there's a lot of volume, and that's why I like it.
Another thing to note is that as your contracts lose value, the theta (and your leverage) will increase. Meaning that if you don't monitor your account, or there's a big drop in one day, you will have more leverage than you would have in the opposite scenario, with contract values rising, and leverage decreasing. The difference is not horrible but is something to note.
In summary, I think this is a decent hedge, especially while you're trying to get your finances up and your stack together in a more linear way. Maintaining $1,000 balance at the minimum could save your life and result in, perhaps, a big windfall. Learn to enjoy it when the price goes down. Accept that you want to maintain a minimum balance that feels doable for you. And understand that if gold were to fall $30.00, NUGT would fall by 9% about three times, your options would fall by 22.5% about three times, and you'd be sitting at $465 or so. The beauty is that if you can return to your $1,000 balance, the upside later on will be not just seventeen 22.5% moves, but 20; or a gain of not just 31.5x, but 58x. Leaving you with a value of $58,000.
The last points I want to make are: 1) Don't [mess around] with the amount of leverage you use. Stick with a system.
2) When you feel like gold is overvalued temporarily and is set for some losses, you can potentially put your money on the sidelines. It's up to you and depends on how groovy you are. I think the easiest way to go is to just keep it in and scale up and down with it. Otherwise you spend way too much time analyzing the markets and stressing out over it.
3) Only risk what you can live with losing. If you had invested $1,000 when NUGT was at $34.50, you'd have $13 today. I personally like the strategy of maintaining a minimum account value that you can afford to "make whole" again when incurring losses. This way you can happily cheer when you're losing money.
4) Have a plan to get into physical and perhaps actual shares of actual mining companies. NUGT is just a derivative like anything else. Good luck
cat2005 jonebize Nov 26, 2016 12:40 AM
WTF did I just read? LOL.
HaizmansBrain jonebize Nov 26, 2016 9:23 AM
Assuming of course things remain relative. When NUGT reverse splits, (most likely soon, and probably 5:1 again) your going to be left with a pile of illiquid options worth 1/20th the day before.
Caveat Emptor!
jonebize duck dodgers Nov 25, 2016 9:58 PM
PS Look at the 10-year chart for NUGT and calculate the potential upside using the method I described
Splits/Reverse splits mean nothing to value of the holding. You still have the same dollar value.
(Que the troll). lol
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I wonder how those options fared the past few weeks
And definitely bullish. Points to 10 year chart and does not suggest converting to puts if an overbought situation occurs.
Also, this is another if situation as evidenced by the author's if. The if left out is if the market is timed well or not. Image being out of synch long enough to turn that $1000 into $100. The 10 year chart does not help on a rolling 90 day time frame.
TLDR: more musings. The humorous flailings - without much humor - of a guy who hopes without evidence for hope that he can "get [his] finances up and [his] stack together in a more linear way". My early reading is piecemeal. Request recommendations for best sites for free learning on the subject.
You're right @MsMorrisine. He doesn't suggest puts. In fact, he implies not using them. And yeah, I'm definitely bullish, too. But isn't DUST there for the inevitable pull-backs on the way up? Whatever gold does - up, down, near-term, medium-term - I'm interested in understanding this because I would love to "get [my] finances up and [my] stack together in a more linear way"!
@derryb obviously has the safest strategy - no overnights, in and out in 1 day. If I had to guess how often a method like jonebize's needs to be monitored I'd say every hour round the clock night and day. But I don't know anything. He presents his method as a simpler solution to avoid some stressers. How do daytimer's get any sleep if things like NUGT can change overnight? How would someone who keeps a full-time job stand any chance of handling an ETF? Has anyone here used a time-cost-per-day calculation like his to decide what to buy and sell, and to maintain a specific range of exposure? I would guess so, since theta appears to be essential knowledge for derivative players. Ugggh. All the inverse relationships and the exponential time decay, down is up, more is less, etc. Arggh.
If anyone can help me unpack this a bit more, I'd be most grateful. Is jonebize saying that he holds his contracts until NUGT has gone up or down 9%, but during that time he sells and buys if his average time-cost-per-day for all contracts goes outside his preferred range? I know I could just write him myself, and maybe I will if I register at that website. I appreciate the chance to start learning these ideas new to me here.I've never understood any of the NUGT threads and stopped reading them. Lingo that I couldn't bingo. But perhaps wading in here has helped peeled back the curtain a little. And I've gone back over the PM threads that mention NUGT to see what I could glean. Anyone have a favorite site to recommend?
I just think this is still a time when anytime is a good time to buy gold and silver, especially silver. And I gotta' do something more, because what I'm doing now isn't getting the cash reserve and the stack together in a steady way.
Scottrade allows me to make pre-market trades between 6-9:28 am and after market trades between 4:02-8 pm. These trades have to be limit trades where I set the trade price. Trades outside normal market hours of 9:30 am - 4 pm cannot be the normal market price trade where you execute the trade at the current market price.
The risk with holding over night is that if metals move the wrong direction you are not able to close your position until 6 am or later. I do occasionally hold overnight if I have enough gain momentum to somewhat protect me. I also set stops to protect me, but again they can only protect me while trading is allowed.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If I were a betting man, I would expect a short term bounce in gold soon. As more of the planned policies are detailed and more holes are found, the euphoria will wear off. We are also starting to see some fighting within the new administration about nominees and policy direction. The recounts will also start taking more and more news time. All of which increases uncertainty and uncertainty is generally positive for gold.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I like my real money in the bank and my play money in hand. Playing the stocks always costs me real money. But, investment advice I get here for free is usually worthless from day to day.
I would recommend buying preparation H
The bottom line is that this "system" of trading has a strategy that is vastly negative,(long options) applied to an asset that also has a negative expected return over time (3xETF). Could you make money occasionally? yes, but it would not be much different than playing a a few numbers on the roulette wheel(a leveraged bet). Trading this way over time would however, eliminate any need to stack, because you would be broke, sadly.
Now, if you went long NUGT when it went up and sold when it topped out and then bought dust and held through the drop and did this over an over. you would be rich, what could be easier?
The only downside is that you would wake up and realize your timing is as bad as the rest of the mere mortals here.
Also from the link: "United States Commodity Funds, the issuer of the United States Oil ETF (USO), has filed to launch the United States 3x Oil Fund and the United States 3x Short Oil Fund. The two funds will be tied to the performance of futures contracts on light, sweet crude oil. The recent filings are for exchange-traded funds rather than ETNs."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Even though it was widely expected, the rate increase seems to be to be hitting NUGT and GDX pretty hard, hitting lows not seen for over 10 months.
edited to add.. JNUG and NUGT both down over 30% in 4 hrs of trading since rate hike was announced.
GDX currently at 18.9, it has a little support at the 18.60ish level, then at the low 17s. I would expect to test the 1st support soon, because of tax loss selling and negative momentum. Wouldn't bet on it holding.
@DoubleEagle59 said:
Nugget is looking good, closed at $11.
Time to sell?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@dontippet said:
I sold at $11.41 right before it headed to around $10.77. We'll see if I made the right decision. Made over 35% on my short-term hold.
That's exactly what I made.
Bought end of Nov at $8, sold yesterday morning at $11 (missed yesterday's high of $11.50) and made about 35%.
First time buyer of this crazy 3xetf, but if you're good at timing, it's a money maker.
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
I have a good friend who has looked after his own investments for over 20 years and has done quite well.
He's into puts and option calls, something I unfortunately know very little of.
When I told him I owned NUGT (and at this time it was a week before Xmas) and told him I owned it for about 3 weeks, he nearly choked on his dinner and said to me "sell it tomorrow.-- Never own this overnight. -- It's only for day traders --it's absolute lunacy to hold onto a stock like this"
He also said 'do you know how these 3xetfs work?"
This is where he lost me.
He said something like 'they re-set after each day's closing and they could go to zero overnight"
I didn't question him any further because we had our wives with us as it was a Xmas dinner get together, but if anyone here can explain or clarify what he was getting at, I would greatly appreciate it.
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
@DoubleEagle59 said:
I have a good friend who has looked after his own investments for over 20 years and has done quite well.
He's into puts and option calls, something I unfortunately know very little of.
When I told him I owned NUGT (and at this time it was a week before Xmas) and told him I owned it for about 3 weeks, he nearly choked on his dinner and said to me "sell it tomorrow.-- Never own this overnight. -- It's only for day traders --it's absolute lunacy to hold onto a stock like this"
He also said 'do you know how these 3xetfs work?"
This is where he lost me.
He said something like 'they re-set after each day's closing and they could go to zero overnight"
I didn't question him any further because we had our wives with us as it was a Xmas dinner get together, but if anyone here can explain or clarify what he was getting at, I would greatly appreciate it.
it's called decay, a feature of many leveraged ETFs. Only really hurts you if price goes down or even holds steady. OK to hold as long as price is rising, the decay is minimal but it does add up the longer you hold. I do not hold unless price is continuing to rise. In most cases the rising price far outweighs the slight decay.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
don't forget their is an opposite to NUGT: DUST. They do exactly the opposite of each other. Gives you opportunity to make money in both price directions.
Be sure you understand the underlying asset that an ETF is following. In the case of NUGT it is the Gold Miners ETF GDX, not the price of gold. While the price of gold will affect NUGT, gold miners have and can show gains while gold does not - gold miners are also affected by overall stock market direction.
There are leveraged ETFs for many assets and most have an inverse (opposite) ETF product available. I like to thing of ETFs as the modern form of mutual funds. Unlike mutual funds ETFs are bought and sold just like stocks - much simpler than mutual funds.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
But the gold bug in me just can't pull the trigger on a fund that makes money when the PM prices drop.
consider it an opportunity to profit in both price directions. Hey, it's only paper gold. lol.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@dontippet said:
Down 14.2% since I sold two days ago. Should I get back in?
Only if you think it Is gonna go up.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@bluelobster said:
Interesting, gold barely moves and JNUG and NUGT get hammered..
Good day to own DUST and JDST, I guess..dang
because gold miners (GDX and GDXJ) took a good hit.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Entered a position in NUGT today. Not sure the timing was right, but think gold won't too much below $1200 and oil/fuel price for miners has been dropping which should help them in their operating cost.
My JDST stop hit at $21.50 Friday afternoon (40% gain over 2 weeks). I may jump back in later this week. Still looking for GDXJ to hit Dec lows. Then I'll be in 50% JNUG and 50% individual gold/silver stocks.
Bought a load of NUGT at 27.50. Quantative Tightening (QT) and rising rates should bode well for the gold miners.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
Bought a load of NUGT at 27.50. Quantative Tightening (QT) and rising rates should bode well for the gold miners.
@derryb said:
Bought a load of NUGT at 27.50. Quantative Tightening (QT) and rising rates should bode well for the gold miners.
Why derryb? I'm not of the opinion the miners can't bounce, but just 2 years ago the miners were supposed to go up because of QE and easing rates. Now they are supposed to go up for the opposite reasons?
This intermarket relationship stuff ain't so simple, is it?
Comments
Miners will be working for minimum wage pretty soon.
Under $8 today. Should have shorted it all the way.
bob
If you read through the thread excerpted below, please discuss. I'd really be interested in any comments that you have. Have never done anything like this, but jonebize's outline of how he trades NUGT compelled me to start looking into it. Reading your Nuugggeettt thread, I can see some people here could have a thing or two to say about his method. How does it stack up with what you do? If this is the wrong place to post this, please let me know - I don't want to derail your thread. (I've got a list of previous threads and I'm slowly reading through ones like Got my NUGT's back....., so I'm not expecting anyone to repeat what they've already said unless they want to.) Source: This is from comments below a ZeroHedge article (Nov. 25) titled, Gold Options Traders Most Bearish Since July 2015
TLDR: First guy complains he can't stack. Second guy steps up, outlines his trade system using NUGT. Third guy gets his mind blown. Fourth guy cautions caveat emptor. Second guy's post-script to First Guy humbly suggests checking out the NUGT 10-yr chart.
duck dodgers Nov 25, 2016 8:25 PM
Everytime ive tried stacking I ended up running into some kind of financial issues and I had to sell. It sucks because you have to buy at a premium and if you have to sell your lucky to get spot.
jonebize duck dodgers Nov 25, 2016 9:56 PM
Hey bud, I have the flu and feel horrible; I didn't feel like writing you but I'm going to anyway. I get the impression a lot of dudes on ZH have decent incomes and can afford to stack a good hedge outright. I'm not in that position. What some people do on here is trade stocks or options as a means to get more capital to put into physical. I trade options because of the leverage. I'm going to outline how I trade.
I trade the 3x ETF with the ticker symbol NUGT. I trade between 30 and 60 days to expiration, rolling them over to stay in that window of time because it's a good balance of high leverage and acceptable time loss. To decide what call options to buy, I divide the theta (time cost per day) into the price of the contract, going with a strike price where the theta is between around 0.20% and 0.33% of the contract price, meaning you pay 0.20% to 0.33% a day just to hold the call options. In this window of time (30-60 days) and with this theta-percentage, you get leverage of about 2.5x over NUGT.
Bear in mind, NUGT is a 3x ETF of the gold index. What this means is that everytime the gold index goes up by 1%, you make 8%. Because it compounds, there is potential for serious gains. In order to keep the theta-percentage within the range of ~0.20% to 0.33%, I typically sell options and buy new ones when the percentage gets outside of that range. Why? Because I don't want to pay a (much) higher % in time cost, and on the other hand, I don't want to go into super low-percentage thetas, because it would give me less leverage. In other words, I sell my options contracts when the theta-percentage goes too far outside of that range, and I buy new contracts that are within that range. I call this "scaling."
As for the upsides: you're talking about compounding gains here. As a guide, I scale contracts for every 9-10% move up or down in NUGT. A 9% move in NUGT is a pretty typical move for every $10.00 move in the price of gold. Because you get 2.5x leverage over NUGT, every 9% move in NUGT results in a 22.5% move in your NUGT options. To calculate the potential upside to the recent high in NUGT (around $34.50) from today's close ($7.74), open your calculator, and count the number of times you have to multiply $7.74 by 1.09 in order to reach $34.50. I calculated just over 17.
Now, remember that you make 22.5% everytime NUGT moves 9%. If you were to hold options until NUGT reaches $34.50 again, you would make a 22.5% gain the same number of times: 17. Calculated out, $1,000 invested today would result in 31.5x gains, or $31,500. Not a bad stack. Bear in mind that you can lose your shirt, and that you should only risk the amount of money you can live with losing. Also bear in mind that you have to pay commission fees and spreads. Spreads aren't bad on NUGT because there's a lot of volume, and that's why I like it.
Another thing to note is that as your contracts lose value, the theta (and your leverage) will increase. Meaning that if you don't monitor your account, or there's a big drop in one day, you will have more leverage than you would have in the opposite scenario, with contract values rising, and leverage decreasing. The difference is not horrible but is something to note.
In summary, I think this is a decent hedge, especially while you're trying to get your finances up and your stack together in a more linear way. Maintaining $1,000 balance at the minimum could save your life and result in, perhaps, a big windfall. Learn to enjoy it when the price goes down. Accept that you want to maintain a minimum balance that feels doable for you. And understand that if gold were to fall $30.00, NUGT would fall by 9% about three times, your options would fall by 22.5% about three times, and you'd be sitting at $465 or so. The beauty is that if you can return to your $1,000 balance, the upside later on will be not just seventeen 22.5% moves, but 20; or a gain of not just 31.5x, but 58x. Leaving you with a value of $58,000.
The last points I want to make are: 1) Don't [mess around] with the amount of leverage you use. Stick with a system.
2) When you feel like gold is overvalued temporarily and is set for some losses, you can potentially put your money on the sidelines. It's up to you and depends on how groovy you are. I think the easiest way to go is to just keep it in and scale up and down with it. Otherwise you spend way too much time analyzing the markets and stressing out over it.
3) Only risk what you can live with losing. If you had invested $1,000 when NUGT was at $34.50, you'd have $13 today. I personally like the strategy of maintaining a minimum account value that you can afford to "make whole" again when incurring losses. This way you can happily cheer when you're losing money.
4) Have a plan to get into physical and perhaps actual shares of actual mining companies. NUGT is just a derivative like anything else. Good luck
cat2005 jonebize Nov 26, 2016 12:40 AM
WTF did I just read? LOL.
HaizmansBrain jonebize Nov 26, 2016 9:23 AM
Assuming of course things remain relative. When NUGT reverse splits, (most likely soon, and probably 5:1 again) your going to be left with a pile of illiquid options worth 1/20th the day before.
Caveat Emptor!
jonebize duck dodgers Nov 25, 2016 9:58 PM
PS Look at the 10-year chart for NUGT and calculate the potential upside using the method I described
Splits/Reverse splits mean nothing to value of the holding. You still have the same dollar value.
(Que the troll). lol
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Bullish options author
I wonder how those options fared the past few weeks
And definitely bullish. Points to 10 year chart and does not suggest converting to puts if an overbought situation occurs.
Also, this is another if situation as evidenced by the author's if. The if left out is if the market is timed well or not. Image being out of synch long enough to turn that $1000 into $100. The 10 year chart does not help on a rolling 90 day time frame.
Thanks for your comments!
TLDR: more musings. The humorous flailings - without much humor - of a guy who hopes without evidence for hope that he can "get [his] finances up and [his] stack together in a more linear way". My early reading is piecemeal. Request recommendations for best sites for free learning on the subject.
You're right @MsMorrisine. He doesn't suggest puts. In fact, he implies not using them. And yeah, I'm definitely bullish, too. But isn't DUST there for the inevitable pull-backs on the way up? Whatever gold does - up, down, near-term, medium-term - I'm interested in understanding this because I would love to "get [my] finances up and [my] stack together in a more linear way"!
@derryb obviously has the safest strategy - no overnights, in and out in 1 day. If I had to guess how often a method like jonebize's needs to be monitored I'd say every hour round the clock night and day. But I don't know anything. He presents his method as a simpler solution to avoid some stressers. How do daytimer's get any sleep if things like NUGT can change overnight? How would someone who keeps a full-time job stand any chance of handling an ETF? Has anyone here used a time-cost-per-day calculation like his to decide what to buy and sell, and to maintain a specific range of exposure? I would guess so, since theta appears to be essential knowledge for derivative players. Ugggh.
All the inverse relationships and the exponential time decay, down is up, more is less, etc. Arggh. 
If anyone can help me unpack this a bit more, I'd be most grateful. Is jonebize saying that he holds his contracts until NUGT has gone up or down 9%, but during that time he sells and buys if his average time-cost-per-day for all contracts goes outside his preferred range? I know I could just write him myself, and maybe I will if I register at that website. I appreciate the chance to start learning these ideas new to me here. I've never understood any of the NUGT threads and stopped reading them. Lingo that I couldn't bingo. But perhaps wading in here has helped peeled back the curtain a little. And I've gone back over the PM threads that mention NUGT to see what I could glean. Anyone have a favorite site to recommend?
I just think this is still a time when anytime is a good time to buy gold and silver, especially silver. And I gotta' do something more, because what I'm doing now isn't getting the cash reserve and the stack together in a steady way.
Scottrade allows me to make pre-market trades between 6-9:28 am and after market trades between 4:02-8 pm. These trades have to be limit trades where I set the trade price. Trades outside normal market hours of 9:30 am - 4 pm cannot be the normal market price trade where you execute the trade at the current market price.
The risk with holding over night is that if metals move the wrong direction you are not able to close your position until 6 am or later. I do occasionally hold overnight if I have enough gain momentum to somewhat protect me. I also set stops to protect me, but again they can only protect me while trading is allowed.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If I were a betting man, I would expect a short term bounce in gold soon. As more of the planned policies are detailed and more holes are found, the euphoria will wear off. We are also starting to see some fighting within the new administration about nominees and policy direction. The recounts will also start taking more and more news time. All of which increases uncertainty and uncertainty is generally positive for gold.
eyes on India.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
for something like nugt, which can have fast moves, always use limits.
Picked some NUGT up on Friday. Nice little pop today.
I like my real money in the bank and my play money in hand. Playing the stocks always costs me real money. But, investment advice I get here for free is usually worthless from day to day.
I would recommend buying preparation H
Speaking of 3x long... right now I am glad I loaded up on UWTI yesterday.
The bottom line is that this "system" of trading has a strategy that is vastly negative,(long options) applied to an asset that also has a negative expected return over time (3xETF). Could you make money occasionally? yes, but it would not be much different than playing a a few numbers on the roulette wheel(a leveraged bet). Trading this way over time would however, eliminate any need to stack, because you would be broke, sadly.
Now, if you went long NUGT when it went up and sold when it topped out and then bought dust and held through the drop and did this over an over. you would be rich, what could be easier?
The only downside is that you would wake up and realize your timing is as bad as the rest of the mere mortals here.
UWTI being delisted
Last day of trading is Dec. 8. Run Forest, run.
Also from the link: "United States Commodity Funds, the issuer of the United States Oil ETF (USO), has filed to launch the United States 3x Oil Fund and the United States 3x Short Oil Fund. The two funds will be tied to the performance of futures contracts on light, sweet crude oil. The recent filings are for exchange-traded funds rather than ETNs."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Even though it was widely expected, the rate increase seems to be to be hitting NUGT and GDX pretty hard, hitting lows not seen for over 10 months.
edited to add.. JNUG and NUGT both down over 30% in 4 hrs of trading since rate hike was announced.
GDX currently at 18.9, it has a little support at the 18.60ish level, then at the low 17s. I would expect to test the 1st support soon, because of tax loss selling and negative momentum. Wouldn't bet on it holding.
I am stuck in both, I guess I will need to go for a long term hold now.
Successful card BST transactions with cbcnow, brogurt, gstarling, Bravesfan 007, and rajah 424.
When there's blood in the street ...
There is no doubt about that, I am bloody. But that was just a standing 8 count. I just hope I don't get knocked out!
Successful card BST transactions with cbcnow, brogurt, gstarling, Bravesfan 007, and rajah 424.
Nugget is looking good, closed at $11.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Time to sell?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I sold at $11.41 right before it headed to around $10.77. We'll see if I made the right decision. Made over 35% on my short-term hold.
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Successful transactions on the BST boards with rtimmer, coincoins, gerard, tincup, tjm965, MMR, mission16, dirtygoldman, AUandAG, deadmunny, thedutymon, leadoff4, Kid4HOF03, BRI2327, colebear, mcholke, rpcolettrane, rockdjrw, publius, quik, kalinefan, Allen, JackWESQ, CON40, Griffeyfan2430, blue227, Tiggs2012, ndleo, CDsNuts, ve3rules, doh, MurphDawg, tennessebanker, and gene1978.
That's exactly what I made.
Bought end of Nov at $8, sold yesterday morning at $11 (missed yesterday's high of $11.50) and made about 35%.
First time buyer of this crazy 3xetf, but if you're good at timing, it's a money maker.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
I bought on Nov. 11 at $8.52 and sold yesterday at $11.41 for a 34% profit. It's down today, maybe time to get back in.
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Successful transactions on the BST boards with rtimmer, coincoins, gerard, tincup, tjm965, MMR, mission16, dirtygoldman, AUandAG, deadmunny, thedutymon, leadoff4, Kid4HOF03, BRI2327, colebear, mcholke, rpcolettrane, rockdjrw, publius, quik, kalinefan, Allen, JackWESQ, CON40, Griffeyfan2430, blue227, Tiggs2012, ndleo, CDsNuts, ve3rules, doh, MurphDawg, tennessebanker, and gene1978.
I have a good friend who has looked after his own investments for over 20 years and has done quite well.
He's into puts and option calls, something I unfortunately know very little of.
When I told him I owned NUGT (and at this time it was a week before Xmas) and told him I owned it for about 3 weeks, he nearly choked on his dinner and said to me "sell it tomorrow.-- Never own this overnight. -- It's only for day traders --it's absolute lunacy to hold onto a stock like this"
He also said 'do you know how these 3xetfs work?"
This is where he lost me.
He said something like 'they re-set after each day's closing and they could go to zero overnight"
I didn't question him any further because we had our wives with us as it was a Xmas dinner get together, but if anyone here can explain or clarify what he was getting at, I would greatly appreciate it.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
it's called decay, a feature of many leveraged ETFs. Only really hurts you if price goes down or even holds steady. OK to hold as long as price is rising, the decay is minimal but it does add up the longer you hold. I do not hold unless price is continuing to rise. In most cases the rising price far outweighs the slight decay.
Leveraged ETF Price Decay Explained
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Thanks derryb!!
I read your link and other links too explaining 'decay' and now feel a little bit more informed.
I'll still consider buying NUGT in the future, but my 'hold' period will be shorter.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
don't forget their is an opposite to NUGT: DUST. They do exactly the opposite of each other. Gives you opportunity to make money in both price directions.
Be sure you understand the underlying asset that an ETF is following. In the case of NUGT it is the Gold Miners ETF GDX, not the price of gold. While the price of gold will affect NUGT, gold miners have and can show gains while gold does not - gold miners are also affected by overall stock market direction.
There are leveraged ETFs for many assets and most have an inverse (opposite) ETF product available. I like to thing of ETFs as the modern form of mutual funds. Unlike mutual funds ETFs are bought and sold just like stocks - much simpler than mutual funds.
Here's an excellent EFT database website
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yes, I'm familiar with DUST.
But the gold bug in me just can't pull the trigger on a fund that makes money when the PM prices drop.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
consider it an opportunity to profit in both price directions. Hey, it's only paper gold. lol.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Down 14.2% since I sold two days ago. Should I get back in?
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Successful transactions on the BST boards with rtimmer, coincoins, gerard, tincup, tjm965, MMR, mission16, dirtygoldman, AUandAG, deadmunny, thedutymon, leadoff4, Kid4HOF03, BRI2327, colebear, mcholke, rpcolettrane, rockdjrw, publius, quik, kalinefan, Allen, JackWESQ, CON40, Griffeyfan2430, blue227, Tiggs2012, ndleo, CDsNuts, ve3rules, doh, MurphDawg, tennessebanker, and gene1978.
Only if you think it Is gonna go up.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Buy low. Buy lower. Swim for your life.
With this etf, you do not want to be catching falling knives.
I'll get back in but not now.
I'll wait for a good uptrend, get in when it starts and make sure I get out before it's over (anyways, that's the plan).
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Actual screen shot. Sign of an equity top?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
What's the opposite of "trying to catch of falling knife"?
chasing
irrational exuberance
greater fool theory
hopeful thinking
Interesting, gold barely moves and JNUG and NUGT get hammered..
Good day to own DUST and JDST, I guess..dang
because gold miners (GDX and GDXJ) took a good hit.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Last 7 or so days, Nugget dropped from $12.50 to $9.50.
Got back in today at $10.10 (I jumped the gun a bit and should have waited).
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
One-for-four reverse split on NUGT and other Direxion ETFs effective May 1.
Entered a position in NUGT today. Not sure the timing was right, but think gold won't too much below $1200 and oil/fuel price for miners has been dropping which should help them in their operating cost.
Ooof. Recent price $8.01
Liberty: Parent of Science & Industry
My JDST stop hit at $21.50 Friday afternoon (40% gain over 2 weeks). I may jump back in later this week. Still looking for GDXJ to hit Dec lows. Then I'll be in 50% JNUG and 50% individual gold/silver stocks.
Overdate, BestMR, Weather11AM, TDEC1000, Carew4me, BigMarty58, Coinsarefun, Golfer72, UnknownComic, DMarks, JFoot13, ElKevvo, Truthteller, Duxbutt, TwoSides2aCoin, PerryHall, mhammerman, Papabear, Wingsrule, WTCG, MillerJW, Ciccio, zrlevin, dantheman984, tee135, jdimmick, gsa1fan, jmski52, SUMORADA, guitarwes, bstat1020, pitboss, meltdown, Schmitz7, 30AnvZ28, pragmaticgoat, wondercoin & MkMan123
Yes Baley, I'm taking a small hit.
But my first transaction with Nugget made a profit of 8K and that's all I put into this last purchase.
So I'm playing with the winnings, so it's not so bad if the ETF goes south on me as I can live with that.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Up 20% to $9.15 after rate hike...
NUGT may have a nice move up tomorrow!!
Bought a load of NUGT at 27.50. Quantative Tightening (QT) and rising rates should bode well for the gold miners.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Why derryb? I'm not of the opinion the miners can't bounce, but just 2 years ago the miners were supposed to go up because of QE and easing rates. Now they are supposed to go up for the opposite reasons?
This intermarket relationship stuff ain't so simple, is it?
Knowledge is the enemy of fear
Giving it another go?