Stocks: Faz

[brandon]

Well luckily I'm not really playing the market at this point. I have the FAZ in a virtual stock exchange game. I'm forced to be part of this crappy game because of my Accounting class. The teacher won't even let us buy anything under $5 a share. What I have to lose is my pride and reputation. I watched myself drop from the top of our leader board to the bottom.

Faz is not meant to be held overnight. It suffers daily ETF decay due to the compounding. It is a loser. It is meant only to be used as a day trading gambling instrument.

 

[GBurr]

I was only planning on day trading it. The only reason I am playing it at all is I can't play penny stocks.

I guess I'm going to get out and take the lose.

 

[tmosley]

Yup, with increasing government involvement comes increasing government ownership IE nationalization, which means that the stock price goes down. That principle is the ONLY thing keeping me in the market. If the government stops taking increasing stakes in the companies they are bailing out, then I will leave the market as well. At that point, I'll probably head to EuroPAC so I can continue to have some income.

 

[Cowlesy]

Right now, for my speculating portfolio I have:
FAZ: Basis of $10.60 - 3x Direxion Financial Bear ETF
UCO: Basis of $8.70 - 2x long oil ETF
EUO: Basis of $21.48 - 2x Short Euro Currency (relative to USD) *I think the EUR sucks*

@2:18PM
FAZ - $10.61
UCO - $8.47
EUO - $22.43

 

[rockandrollsouls]

I wouldn't touch a bank stock or ETF now that they've changed the MTM rule. I would cut my losses and put your money into something that has more of a stable ground to trade from.

I will say that the banks will eventually crater again, just not when they can utilize fantasy accounting.

Thank you. Finally, someone speaking with sense and logic.

In the end, fundamentals will always come out on top. Slow and steady wins the race....

 

[Cowlesy]

Right now, for my speculating portfolio I have:
FAZ: Basis of $10.60 - 3x Direxion Financial Bear ETF
UCO: Basis of $8.70 - 2x long oil ETF
EUO: Basis of $21.48 - 2x Short Euro Currency (relative to USD) *I think the EUR sucks*

@2:18PM
FAZ - $10.61
UCO - $8.47
EUO - $22.43

@4:00PM Close

FAZ - $11.01
UCO - $8.40 (argh)
EUO - $22.43

Holding these overnight, a pure roll of the dice.

 

[StilesBC]

Faz is not meant to be held overnight. It suffers daily ETF decay due to the compounding. It is a loser. It is meant only to be used as a day trading gambling instrument.

Yes. Thank you. Please people. Do not play around with these things. None of the leveraged ETFs are made for investment purposes. They even state that on their own websites.

 

[Cowlesy]

Right now, for my speculating portfolio I have:
FAZ: Basis of $10.60 - 3x Direxion Financial Bear ETF
UCO: Basis of $8.70 - 2x long oil ETF
EUO: Basis of $21.48 - 2x Short Euro Currency (relative to USD) *I think the EUR sucks*

@2:18PM
FAZ - $10.61
UCO - $8.47
EUO - $22.43

@4/20 Close

FAZ - $11.63 --- I bought an extra 1,000shs at $9.79 last week -- still hold all
UCO - $7.27 ---- sold half last week at $8.40 for a loss, and the rest today at $7.40
EUO - $23.60 --- This is my sleeper play (very low volume so it is not a crowded trade and I am VERY happy with it so far).

 

[tmosley]

I bought back into FAZ on Friday. Needless to say I'm happy I did. I think the financials are set for a death spiral now, but I've put in a stop order at 11.10 in case I'm wrong. I'll be moving it up accordingly as it rises.

THIS IS GAMBLING. I can't emphasize that enough. I can afford to lose every penny of that investment if it comes to that. It makes sense that the financials are on the way to a stock price of zero, but that doesn't stop crazy rules from coming into effect. As I have said before, if the government fails to either nationalize or otherwise wipe out the shareholders, I will pull all of my money out of the US markets and go with EuroPAC.

 

[Cowlesy]

I bought back into FAZ on Friday. Needless to say I'm happy I did. I think the financials are set for a death spiral now, but I've put in a stop order at 11.10 in case I'm wrong. I'll be moving it up accordingly as it rises.

THIS IS GAMBLING. I can't emphasize that enough. I can afford to lose every penny of that investment if it comes to that. It makes sense that the financials are on the way to a stock price of zero, but that doesn't stop crazy rules from coming into effect. As I have said before, if the government fails to either nationalize or otherwise wipe out the shareholders, I will pull all of my money out of the US markets and go with EuroPAC.

 

[tmosley]

With the intelligent use of stop orders, I made a 30% return. I'll probably get back in tomorrow.

 

[slacker921]

With the intelligent use of stop orders, I made a 30% return. I'll probably get back in tomorrow.

nice. Wells Fargo is reporting tomorrow. If it's better than expected (they can cook the books without worries so why not) then FAZ will be crushed. Then again, a really good report is already expected. Anything less than a stellar report will see the banks get crushed and it'll be too late to buy FAZ at the open.


Yes people.. this is gambling. buy-sell-buy-sell-buy-sell... it has nothing to do with investing. Use tight "stop limits", gamble only what you would throw on the table in Vegas and not worry about losing.

 

[OptionsTrader]

Faz is not meant to be held overnight. It suffers daily ETF decay due to the compounding. It is a loser. It is meant only to be used as a day trading gambling instrument.

I am so tired of misinformed bullshit like this. Plenty of people make money on leveraged ETFs when they were making them money and the bitching only starts when the trade moves against them.

Look, FAS and FAZ and the other leveraged ETFs work just like any form of leverage. Unleveraged, if you buy XYZ at 100 and it goes down 50%, you need XYZ to DOUBLE or go up 100% to just break even. If you lever up, you amplify that risk. Leveraged ETFs get people in trouble because they didn't read the prospectus. Novices assume that the 3X ETF will track the same slope as the underlying index, and that is clearly not the case if you read the prospectus.

If you are trading FAZ< and if the Russell Financial Services Index ($RIFIN) starts at 500, and $FIFIN goes up 3% for 10 straight days, guess what, your FAZ is going to lose MORE than 3X the total percent loss in $RFIN, and if $RFIN goes down 3% for 10 straight days for example, you are going to make more than 3X the total percent loss of $RIFIN.

The % moves in FAZ/FAS are compiunded DAILY based on the move in $RIFIN.

It isn't magic, it isn't flawed, it isn't bad, it isn't good, it is what it is, leverage and leverage is dangerous if you are wrong and profitable if you are right.

Are there safer ways to short the financials. You bet.

Are the leveraged ETFs working as designed? Yes.

 

[brandon]

I am so tired of misinformed bullshit like this. Plenty of people make money on leveraged ETFs when they were making them money and the bitching only starts when the trade moves against them.

Not sure why you called what I said "misinformed bullshit" and then just went on to reinforce what I said.

If you really want to hold a leveraged ETF long term, go right ahead though.

Are the leveraged ETFs working as designed? Yes.

Yep sure are, as day trading instruments.

 

[rockandrollsouls]

I am so tired of misinformed bullshit like this. Plenty of people make money on leveraged ETFs when they were making them money and the bitching only starts when the trade moves against them.

Look, FAS and FAZ and the other leveraged ETFs work just like any form of leverage. Unleveraged, if you buy XYZ at 100 and it goes down 50%, you need XYZ to DOUBLE or go up 100% to just break even. If you lever up, you amplify that risk. Leveraged ETFs get people in trouble because they didn't read the prospectus. Novices assume that the 3X ETF will track the same slope as the underlying index, and that is clearly not the case if you read the prospectus.

If you are trading FAZ< and if the Russell Financial Services Index ($RIFIN) starts at 500, and $FIFIN goes up 3% for 10 straight days, guess what, your FAZ is going to lose MORE than 3X the total percent loss in $RFIN, and if $RFIN goes down 3% for 10 straight days for example, you are going to make more than 3X the total percent loss of $RIFIN.

The % moves in FAZ/FAS are compiunded DAILY based on the move in $RIFIN.

It isn't magic, it isn't flawed, it isn't bad, it isn't good, it is what it is, leverage and leverage is dangerous if you are wrong and profitable if you are right.

Are there safer ways to short the financials. You bet.

Are the leveraged ETFs working as designed? Yes.

THANK YOU. I don't believe half the people here really even understand what they are involved with when they trade FAZ. I've only said "be careful with FAZ, guys...." but I really just have to get behind you on this post. UNDERSTAND WHAT IT IS YOU PUT YOUR MONEY IN. THIS ISN'T A GAME.

Personally, I won't touch it. Very rarely do I deal with leveraged securities, but that's just personal preference.

 

[rockandrollsouls]

Not sure why you called what I said "misinformed bullshit" and then just went on to reinforce what I said.

If you really want to hold a leveraged ETF long term, go right ahead though.

Yep sure are, as day trading instruments.

No, your opinion. You will get burned eventually. Same mentality as the sub-penny traders There's no quick way to get rich, buddy. I don't even think you really understand FAZ as indicated by the language in your posts, but that's another debate.

OptionsTrader is a smart guy.....you should consider listening to him.

 

[brandon]

No, your opinion. You will get burned eventually. Same mentality as the sub-penny traders There's no quick way to get rich, buddy.

Did I say there was? I'm not sure what you're even replying to here. Maybe you quoted the wrong post.

OptionsTrader is a smart guy.....you should consider listening to him.

I didn't disagree with him on anything.

 

[PatriotG]

I am so tired of misinformed bullshit like this. Plenty of people make money on leveraged ETFs when they were making them money and the bitching only starts when the trade moves against them.

Look, FAS and FAZ and the other leveraged ETFs work just like any form of leverage. Unleveraged, if you buy XYZ at 100 and it goes down 50%, you need XYZ to DOUBLE or go up 100% to just break even. If you lever up, you amplify that risk. Leveraged ETFs get people in trouble because they didn't read the prospectus. Novices assume that the 3X ETF will track the same slope as the underlying index, and that is clearly not the case if you read the prospectus.

If you are trading FAZ< and if the Russell Financial Services Index ($RIFIN) starts at 500, and $FIFIN goes up 3% for 10 straight days, guess what, your FAZ is going to lose MORE than 3X the total percent loss in $RFIN, and if $RFIN goes down 3% for 10 straight days for example, you are going to make more than 3X the total percent loss of $RIFIN.

The % moves in FAZ/FAS are compiunded DAILY based on the move in $RIFIN.

It isn't magic, it isn't flawed, it isn't bad, it isn't good, it is what it is, leverage and leverage is dangerous if you are wrong and profitable if you are right.

Are there safer ways to short the financials. You bet.

Are the leveraged ETFs working as designed? Yes.

Thanks for the insight.