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Spxl options reddit

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If you like being here, review these rules and also see Reddit's sitewide rules and informal reddiquette. I have seen many posts where someone asks 'why not hold SPXL long term', and people give knee-jerk, poorly considered explanations for why leveraged ETF's are always bad, etc. Meanwhile SPXL is about a 40x return in the last 8 years. I want someone to give a real explanation for why this combined with maintaining a stop loss order to protect yourself isn't an overwhelmingly obvious choice while under a president who will clearly do anything to benefit wall street.

It's very basic to understand - if the underlying stock goes up, and then down, the leveraged ETF based on it will underperform the underlying stock.

You can test it by hand and see it work. So ETF's that track things like commodities with a bunch of noise will be brutally destroyed by beta decay. They are only tools for capturing and amplifying brief volatility.

However, nobody seems to acknowledge that repeated motion in the same direction will result in exponential gains or losses for the leveraged ETF. Run it by hand and see for yourself. I saw one post where someone tried to say 'yeah, but it needs really strong positive motion to overcome the beta decay' - I say No. As long as the motion is consistently positive, it doesn't need to be huge magnitude to cause great results - and enough to overcome beta decay.

Consistency in direction is more powerful than anything. SPXL, under our current administration, is basically an investment vehicle that says, 'I'll make you massive returns unless the entire economy suddenly collapses'. That's a heck of a deal - considering most stocks are just hoping to make you measly returns, which are also at huge risk if the entire economy fails.

So why the heck would you not buy SPXL and maintain a stop loss order, slowly moving that stop loss upwards as you rake in the gains? Decay doesn't exist if the price goes up. I don't care about decay. Volume is good. The only instance in which decay isn't a problem is if the price goes up or down literally every single day until the end of time.

Name one stock that does this. But it's not because of decay. You can try this yourself.Civility and respectful conversation. Options are on topic. Give sufficient details about your strategy and trade to discuss it. Title your post informatively with particulars. Posts titled "Help" or "What would you do? Don't ask for trades. Posts amounting to "Ticker? Think for yourself. Put forward an analysis, trade strategy and option position for critique and discussion. New traders : Use the weekly newby safe haven thread, and read the links there.

Not a trading journal. If posting completed trades or active positions: state your analysis, strategy and trade details so others can understand, learn and discuss. Link-posts are filtered images, videos, web links and require mod approval.

Narrative is required. No Memes. URL shorteners are unwelcome. No profanity in post titles. Promotional and referral links for paid services are not allowed. Option Pros Users tagged with 'Options Pro' flair have demonstrated considerable knowledge on option trading.

Some have professional experience, but the tag does not specifically mean they are professional traders. Approach: Sell slightly OTM puts monthly. This comes out to 4. Seems very conservative, with very little risk to me. Leveraged ETF's are dangerous enough, selling puts on a triple leveraged product is insanity imo.

Are you also assuming the put price volatility would be an issue? Once I sell the puts, the price is irrelevant, because I have no problem exercising them and buying the stock.

Aside from the leveraged part, this is the classic conservative option strategy called the wheel. You sell a put, get assigned shares.

You need to resist the urge to sell a call at a lower price than the prices you were assigned the stock. Because if you get called, you will have permanently lost the difference. The second danger is that you will have dead capital for awhile m. The price may have fallen so far that selling calls at your original price might give you little to no premium. You nailed this. The issue of the stock slipping beyond call premiums is a concern of mine. They'll settle on margin this weekend and I'll start selling calls to try to get rid of them.

But on the off-chance this is the start of a long term bear market, I'll either be stuck paying margin interest for a long time OR have to sell some of my other holdings while they're down to cover, which would really suck. That sounds a bit scary, man.

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spxl options reddit

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Honestly, a lot of people here don't truly understand 3x ETFs. They've heard about them and why they're bad but haven't looked into them further because they were scared off. And then when somebody else inquires about them, these same people always regurgitate the same garbage about "decay" and "rebalancing" and "not suitable for holding long term", although they have no idea wtf that actually means.

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So far, nobody in this thread has been able to do that. Seems to go against the common belief that leverage is literally Hitler. So what does this mean for your investment? It means that when the market tanks, your shit gets rocked. It also means that when the market is flat, you lose money.

If the market is just a little bit bullish, you lose money. The only way you can gain money is in a strong bull market. It just so happens that the market has been pretty damn bullish recently, so yes, a SPXL investment 5 years ago would have yielded you more money than SPY. However, if you look at a chart comparison, those drops are pretty damn scary.

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Terrifying, even. In some cases, you were double SPY, but then dropped below in the blink of an eye. And because of decay, it's harder to claw your way back up after a dip. But you'll notice you're still ahead of SPY, so what's the big deal? You're really counting on the market not to dip lower than it does, and also to recover as fast and sharply as it has. Like I said before, we're at unprecedented levels of bullishness these past few years, so anything that tracks the market at 3x is doing surprisingly well, contrary to everything negative you've heard about leverage.

Will that trend keep up? I don't know. You don't either. It probably won't though, if past history is anything to go by. Even if the market stagnates or doesn't increase as fast, you'll start to hemorrhage money.

spxl options reddit

Problem is that leveraged ETFs haven't really been around long enough to see how past history has impacted their performance. Leveraged ETFs are a gamble. You shouldn't be gambling with your life savings, which is why SPXL is not recommended. If you're confident in the trend, going long on 3x ETFs can be a good play, but it's impossible to be confident in the market's trend. It's reasonable to assume that it will increase over time, but you can't be confident it will increase fast enough or that a crash won't destroy you.

That said, a good time to buy SPXL is after a market crash, because the market usually jumps back relatively quickly. But now you'll notice that we're straying from the original topic of holding leveraged ETFs long term.

What I just described is a short term play. This is exactly what leveraged ETFs were designed for and how they should be used, especially during times when the market ain't so hot.Civility and respectful conversation. Options are on topic. Give sufficient details about your strategy and trade to discuss it. Title your post informatively with particulars.

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Posts titled "Help" or "What would you do? Don't ask for trades. Posts amounting to "Ticker? Think for yourself. Put forward an analysis, trade strategy and option position for critique and discussion. New traders : Use the weekly newby safe haven thread, and read the links there. Not a trading journal. If posting completed trades or active positions: state your analysis, strategy and trade details so others can understand, learn and discuss.

Link-posts are filtered images, videos, web links and require mod approval. Narrative is required. No Memes. URL shorteners are unwelcome. No profanity in post titles. Promotional and referral links for paid services are not allowed.

Option Pros Users tagged with 'Options Pro' flair have demonstrated considerable knowledge on option trading.

Some have professional experience, but the tag does not specifically mean they are professional traders. Is there any real leverage on 3x options spxl? Wouldnt the higher volatility be priced in? This would make it pointless to buy options on 3x etfs, has the regular ones have more expiration dates and higher liquidity.

But im willing to overlook that if there is truly higher leverage. Yes through implied volatility. The mechanics of running all but the simplest etfs are far from the theoretical ideal.

And that is why shorting the inverse 3X can work out. Best example is TBT, since the options are liquid. I suggest trading the regular options. Better liquidity, better understanding are worth a lot.

There may be a few cases where the triple leverage options give better results. Use of this site constitutes acceptance of our User Agreement and Privacy Policy. All rights reserved.

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Please consult with a registered investment advisor before making any investment decision. SPXL is the best long term investment option, prove me wrong.

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Now, that has been during a tremendous bull market but still, unreal returns. Why not stop wasting time evaluating stocks and go long on SPXL permanently?

Not a trader, but the fund itself and multiple websites say based on the way it is structured, it is specifically not a buy and hold etf. Take it as a rule of thumb. That's not 3x, it's 2. It's also during a bull run. If you include down markets too, it will be far worse. I know, it would not be good. Except it is leveraged. And there is the problem.

I was hoping that would come up lol. Yeah idk what would happen. Reverse split maybe? Inherently, no matter how leveraged, it can't be worth literally 0. Why couldn't it?By advantage gambling and investing with real money online, I put my money where my mouth is.

I also write about my success or failure and run a small business. And more specifically: What do you think we should do different to succeed. For start, how about setting the minimum of analysis to 50 words instead of 100. And how about allowing tipsters to include a photo with the analysis. In my case, that would make a huge difference, given I usually base my analysis on betting odds graphs.

Will definitely consider it. I have a query.

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We can submit only tips on betting or there is a facility of guest posting as well. As I recall, we can only post tips. However, you may try contacting them directly for guest posting opportunities. Likes science, video gaming, photography, filmmaking. HomeStart HereGamblingInvestingPhotographyVideographyEntrepreneurshipWeb DevelopAboutMy WorkProjectsContactBlogArchivesWrite For Me.

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How to post your first betting tip at BettingExpertMy first attempt to publish a betting tip failed miserably. Get my Posts in Your Email For Free. Jim Makos By advantage gambling and investing with real money online, I put my money where my mouth is. Thomas Jim Makos Hi Thomas, thanks for commenting. Looking forward to your follow up post.

Jim Makos As I recall, we can only post tips. Planet Bet Thanks for the suggestion!. Warning, probably my worst work but got it done in 24 hours.

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Part of it, to be honest with you, is MMA does it just a little bit different than boxing, where they have enough free cards. As far as the free on regular TV, MMA keeps a lot of interest, and I think that helps them on the back end with their pay-per-view. That was really good for MMA and the UFC, obviously.

Betting on SPXL - Hidden Dangers Investing in Leveraged 3x ETF’s

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We ended the month with a total profit of 126 points which means we are now back in the game with an overall profit of 28.


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