Jump to content

Leveraged ETFs - Share Dealing


Ronnie_R

Recommended Posts

My First post. Go Easy please!

 

I am just a year into my trading experience. With no lump sum to start simply relying on monthly investments from my small business income. As I am late to the party in terms of age I have figured out a reasonable 12-year plan running up to retirement.

 

So with that background I need to be as expansive as possible, not just safe-investing and hedging, but also going out-there to the riskier edgy side of things to try and create a capital pot.

 

I have noticed there are a number of 2x and 3x ETF products out there. Some appear to be specifically very short term instruments according to their issuers, others appear to erode and possibly self destruct. But some I can't figure out at all... In particular the Vix products. I like many believe that volatility must and will return at some point in the future. maybe next year, maybe in three. I don't really care when so long as its sometime within the next 12!!. From what I can figure out Volatility is historically low and unlikely to drop much more, so I have punted a small amount in a couple of the VIX products in the last few weeks.  Vix dropped even lower today and I am so tempted to buy even more but have already decided that VXX might be permanently non responsive in comparison to the 2X alternatives out there.   I'm looking for an opinion on this.. Is it likely that a 2X ETF fees would erode an investment faster than the VIX market is likely to return. Are these only very short term instruments or can they be punted for a year or three?

 

Thanks for your opinion.

Link to post

Hi ,  Good post on a very interesting subject, the vix affects all markets because of it's direct relation with the S&P 500 and you are right that it has been averaging low for some time now and seems to be settling into a new normal but still prone to spikes on very bad and very good news. I've dug out this from 'The Motley Fool', I caught this last month and may be of some interest to you.

 

https://www.fool.com/investing/2016/08/22/dont-use-vix-etfs-to-bet-on-volatility.aspx

 

vix1.PNG

Link to post

Hi  Welcome to Community and congrats on your first post. Very insightful and hopefully the wider community will be able to help going forwards. 

 

Based on a couple of things you've said I thought I should just add a comment and maybe direct you to some places within the IG eco system you may find useful. Academy maybe a useful resource, especially the parts which focus on trade planing and risk management. 

 

You may also like out News section on the Investments page. It's specifically aimed at share dealing and longer term investments stuff, so it's probably worth a read. 

 

Finally the IG Live video section may also be interesting. I've included a video below. 

 

 

All the best, and if you have any questions just shout. 

Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • General Statistics

    • Total Topics
      15,433
    • Total Posts
      73,993
    • Total Members
      62,369
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    jaloldean
    Joined 19/06/21 02:00
  • Posts

    • This weekend don't forget the rules to SAVE LIVES!!!!!   ... unless of course you happen to be going to Ascot 👍
    • Looks like it's a flat squib affair for the SP500 - I'm away early next week, but I'd give this until Tuesday (max 3 weeks after the physical date) to do something otherwise I'm marking it down as a failure Which is not bad, out of all the TC's this one is the one to be most concerned won't work, especially during an UP Bullish major cycle, which is what we are in, but the expectation was for the market to react as per May 2012 as shown on the Internal cycle harmonic chart in the post directly above So unless we get a 7%+ correction from the highs next week - I'll simply log this as failed - remember we trade the market NOT the Time Cycle  The small correction into the actual date is NOT good enough to say that was it! - We should be able to see these corrections/upswings clearly on a monthly chart, which means they should be of significance I'll hold off publishing the next Time Cycle just in case something happens next week SP500 Index Daily Chart: data to Thursday 17th June 2021
    • and Gold Puked at 10 year resistance line  
×
×
  • Create New...