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TFC Commodity Trading Forum

Re: Silver/Gold Ratio Chart/Still a Sic Pup/Trades

Trades,

you are spot on about ZSL. I still have some that I bought awhile back and based on the price of silver you would expect the shares to be worth quite a bit, but they are very disapointing.

I did a few simulations on a spreadsheet shortly after I bought them to truely see how the 2X leverage works on different size moves with the leverage re-setting everyday. You can have a big move down in silver and you get the leverage for that day, but if it grinds higher back to the original price over a five day period you get the resetting of the leverage over 5 days against you. Its almost like having compound interest going against you for 5 days. Also since its 2X leverage they must have underlying intruments to provide this, but does it always hit the 2X leverage everyday. I doubt it.

I was looking to exit ZSL a couple of days ago, but didn't. I am watching and will keep an eye on the price points that Andrew and you mentioned.

I have had 2 or 3 news letters from writers trying to sell their newsletters, and they make these 2X inverse ETF's out to be the greatest invention, since sliced bread. I would agree with you when you get a significant move in your direction take the money and run.

Also some of the big silver moves happen in the night market. I think when it made its thrust down to around the $26 level by the time the stock/ETF markets opened it had recovered quite a bit.