You need to upgrade your Flash Player
-$1.27 (-0.89%)
11:10PM (15 mins delay)
Jul 29, 2009 - 5:17 AM EDT
Bill Luby submits:Yesterday, I did my best to be provocative in Is the VIX Being Artificially Depressed by Increased Use of SPXU? One of the points I made is that ProShares' UltraPro Short S&P 500 ETF (SPXU) could be a substitute for SPX puts (and perhaps artificially depress the VIX as a result) for those who are looking for leveraged ETFs as possible portfolio hedge. To be perfectly frank, I do not believe there will be substantial demand for SPXU (or any of the triple ETFs) as portfolio hedging vehicles, largely related to the issue of the compounding effect (see Understanding the Impact of Changing Market Exposure on Leveraged ETFs from Direxion for more details.)
In fact, when I predicted a bright future for SPXU and ProShares' counterpart the UltraPro S7P 500 ETF (UPRO) in The Next Big Thing? back when they launched a month ago, I envisioned three primary uses for these triple ETFs:
Source: Seeking Alpha (Jul 29, 2009 - 5:17 AM EDT)
© 2009 UpDown. All Rights Reserved.
Make a suggestion for this page
Data powered by QuoteMedia (Terms of Use). Data delayed 15 minutes unless otherwise indicated.
