I have chosen technology to buy 1 year call options expiring Jan 2014 on QLD with a strike price at $41.50 for $18.25 for three reasons. The first is simply because of my overall view of the markets. I believe they are poised for a very bullish year in 2013. With the election behind us and most of the fiscal cliff issues settled, one can feel more confident in the housing recovery, or at least the housing bottom, among many other sectors. The second reason explains why I specifically chose technology. I have always been a big advocate of the technology sector, as it has outperformed in nearly every bull run in history, but when looking closer at the components of the Nasdaq 100 (which this ETF mirrors with leverage) you will find that AAPL represents 13.3%. I have always liked AAPL, as you can see from my CAPS pick in addition to my real money investments, but now that it has dropped from $705 to $450 with earnings growth of 50% per year for 5 years, it is a bargain in my opinion. With Apple driving the Nasdaq 100 forward this year I believe it will outperform the S&P, which has similiar long-term leveraged options available with the ETF SSO. The last reason is why I chose a leveraged ETF as opposed to one without leverage. The overall opinion with leveraged ETFs is very negative with many people believing that the decay they generate is significant enough to drastically minimize their returns. As you can see with my UPRO pitch years ago, I have found in my research that the magnitude of the gains of the underlying index are great enough to more than offset the decaying factor and to justify the risk involved. I bought long-term call options on URE from Q3 of 2009 to Q1 of 2012 that played very nicely for me and I am hoping for similar results with these options. It is important to allocate a small percentage of your portfolio with assets as leveraged as these, however if you can successfully recognize a bull market, these are definitely the way to go.
I am not sure we are at the bottom, but I am sure that we are very close. I am recommending a long position in this etf. Every time there is a 10% drop in the index you should buy, and every time there is a 10% increase in the index you should sell. I do not recommend purchasing and holding ultra etfs long-term. The fees are simply too high. Play the trading range and don't get too greedy.
Will lose tracking accuracy if held more than 1 day, so definitely will underperform in the long run. No brainer.
Ultra-shorts and Ultra-pros are all bad investments due to daily rebalancing
Because Ultras Suck
This is a daily tracking double leverage instrument - about as toxic as you can get. I still can't believe the SEC doesn't put the people who bundle and sell these sorts of instruments in jail.
c'mon now - unsustainable bear market rally.
Bottom is REALLY in here...
The night is darkest before the dawn.
MF pick of #1 on list
Market bottom or very low at least, expecting the market to rebound and this ETF will take advantage of that. Hold for a period of time.
As of 4/3/2013, I think we are around a double-top on the overall market. Two months out I think it is much likely to be lower. There will be a VIX spike if this happens, so I am going to open some long put positions. I am almost always wrong on these calls though!
I don't believe this is a case of catch a falling knife. I think it could easily go down more but not compared to the upside.
Best stock ideas 2008
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