Today’s part of my educational series will focus on specific strategies that can be used for trading inefficient leveraged ETFs. I think, that those who read my articles on a regular basis understand, that keeping these products for a long time – to have these ETFs in the portfolio – is kind of financial suicide. […]
I want to write my first post in the new year as a small recapitulation and a look back to the last year from the ETF point of view, and especially – and as you can probably guess – to those that did badly last year. Paradoxically, those are the most interesting for us. […]
In the last part of the series, we have described the main potential issues connected to the holding of leveraged ETFs for a long time – it is so called compounding, or tracking-error, as we say in our fund. When the market is volatile, this phenomenon can wreak havoc on the value of the leveraged […]
In this part of my series, I will make an introduction to the leveraged ETFs and explain how the “tracking-error” or if you want compounding works with those instruments. The leveraged ETFs are designed in the way that their daily % yield or loss is multiplied compare to the non-leveraged instrument. At first glance, this […]
In the last two parts of my series, I have shown you why I consider VIX and its derivatives as a very interesting source for generating alpha. In today’s article, I would like to focus more on the first condition, i.e. high contango. So, let me explain what the contango is all about and what […]
Last time I described how ETFs track their underlying indices. I made my point using this chart that compares 10-year performance of the most liquid SPY ETF (red) and the underlying S&P 500 index (blue)… You can find the whole article HERE.
I described how ETFs are a convenient way to trade an index, for example the S&P 500. The question is, how good is ETF in tracking the underlying index? Well, it’s damn good! Take a look at the next chart which is comparing price of the S&P 500 index (blue, left axis) and the derived […]