Quote:
Originally Posted by darklord700
HOU is 200% leveraged. So day 1 oil is $30 and loses 10%, HOU will lose 20% or $6.
Day 2 oil start at $27, if you gain 10%, HOU gains $2.7X2=$5.4. So day 1 and 2 combined you still lose $0.60. Is that right?
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While a good thought, that's the same with any equity.
If day one apple goes down from $100 to $90 (loss of $10 or 10%)
Day two apple goes up 10% you're back to $99 and you've lost $1.00 even though you've had one 10% down day and one 10% up day.
There's also fees involved in the management of these leveraged products which eat into returns.