Lately, I've been fascinated by the double-short ETFs like SRS and SKF. I have yet to see an analysis of these vehicles that made sense.
These ETFs track (and compound) -2x the daily swing in the underlying index. Several folks have already mentioned that volatility acts against the long holders of these securities. I am searching at the moment for a quantification of the volatility reduction, but have found nothing as of yet.
Perhaps I will have some spare cycles over the holiday. In the meantime, any pointers are welcome.
2 comments:
well?
I am a trader who owns SRS as a bet againt REITS for 2009 as well as FXP as a bet against china & the FTSE.I am absolutely in love with srs.You have to keep an eye out but the risk/reward is unbelievably compelling right now.Bought SRS for a 120 and sold it at 250 and I am currently loading up for the next big run.Since I am sitting on a sizable gain I am going even futher by buying FAZ(300% bear financials)..god do I love this game.
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