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Why you don't buy and hold UWTI (ZZ)
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Why you don't buy and hold UWTI (ZZ)# Stock
S*6
1
这位的主要意思是说, 如果你不是为了 Day Trading, 远离 UWTI.
(ZZ)
See :
http://www.reddit.com/r/wallstreetbets/comments/2sioam/why_you_
Of course there's time decay, it's a daily leveraged ETF. The thing is, you
could still make a killing buying and holding DWTI, even with the decay. The
opposite of course happened with UWTI, and the negatives of time decay hurt
even worse, but case in point is this.. If you bet on a market trend
continuing in one direction like oil has, you'll make some good money, but
that's only if the trend continues due to the decay factoring into the cost
of the leveraged ETF. I don't understand your point OP?
That no one should hold onto a leveraged ETF unless they're positive it will
react in their favor soon? That should be obvious because if you're holding
onto UWTI now, and it bounces in like 4-5 months from now, then you'll be
losing a lot of it to decay anyway. That's even if oil rebounds.
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S*6
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继续关注这个网站的讨论
(ZZ)
Could someone tell me what would happen if:
You buy 6000$ UWTI and prices of crude oil go up to 100$ in 6 months. What
would that decay actually do ?
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[–]Drew0054OIL IS MY TRIGGER[S] 3 points 6 months ago
Grant you a yield far below $18k. I think it's assumed triple leverage gets
you at least close to 300%, and it does, but only intraday. Everyday
portfolio re-balancing happens.
I have no way to know for sure, but you'd be extremely lucky to pull 100-200
% in that case.
Now if oil halves instead of doubles (both seem just as likely at this point
, TBH) you'll see the collapse in equity that UWTI experienced this past
quarter.
It's like risking $100 to win $10; it's not worth it.
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(ZZ)
This is a chart of UWTI (3x Long Crude Oil ETN) vs. 3 * WTI futures, the
underlying. Basically, in the span of about three months, UWTI has lost >90%
of it's intrinsic value.
Guys, these are "daily" ETFs for a reason, they're meant to be day traded
and sold at the end of the day. I'm shocked at all the posts saying to hold
UWTI because oil "must go up".
If you want to buy and hold oil, hold XLE
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4
(ZZ)
I play UWTI and DWTI daily. Important things to know, free education.

Oil typically follows several factors, an example is the USD, it is not
right now, oil prices are moving from long and futures investors. No
reasoning, you just go in and hope it does well. Pro tip, conflict news is
pushing it around too, oil well reports are not like they typically do.

They can go to $0. These are not asset backed. Also, UWTI will never see $66
again because of decay. If you don't know about decay you need to do more
research before you take a position. P.S. the $ goes in front of the number.

Fees, they have fees and they will eat you if you hold over a week long.
These are not long term investment vehicles, they are to be traded daily or
over 5 days, not weeks, months, or years.

Not 3x like you think. They do not move 3x times linear.

Playing UWTI and DWTI is not for the faint of heart or the uneducated, you
will burn at the altar. Do a lot of research before trading these. If you
buy them through E*TRADE you will see that they put a clause in the
description. If this does not make sense you need to do some homework.
Here is E*TRADE’s disclaimer: "not suitable for investors who plan to hold
positions for longer than one trading session. These products are designed
for highly experienced traders who understand their risks, including the
impact of daily compounding of leveraged investment returns, and who
actively monitor their positions throughout the trading day."
I hope you learn about them and play, it is fun and rewarding but be ready
to burn some cash learning. All the DWTI players right now are experiencing
that.
If you are looking to LONG oil you should look into USO or WTI. or oil based
companies XOM, HERO, etc.
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