poor man's hedge fund

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  1. #1

    Join Date
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    Thumbs up poor man's hedge fund

    Inverse Leveraged Short ETF Strategy - Double Digit Gains in Up or Down Market | Darwin's Finance

    due to the daily rebalancing of leveraged etf. you can pretty much make profit in any market. just read the article, i am pretty convinced.

    but i am not sure if there are any leveraged etf pairs that you can short in hong kong.

    I looked up FAS and FAZ on yahoo, both are down overtime.

    Direxion Daily Financial Bear 3 ETF Chart - Yahoo! Finance

    Direxion Daily Financial Bull 3 ETF Chart - Yahoo! Finance

  2. #2

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    if the market takes off, you need to buy some options

    "Hi Johnny, you’re right about starting in March. That was about pivot bottom for the worst decline and then rebound in our generation. That’s the chart I included in the “Bad Chart” example at the end. If you just left the positions open you’d get slaughtered. That’s where the active management comes in. Here’s how you would have made a fortune…Let’s say once FAS was up 50% and running more daily, you said to yourself, “I better take some action here and protect my position from further losses”. You guy and buy puts on FAZ. If FAS continues to run, your FAZ puts come into the money. If FAS falls, the puts will expire worthless, but the double short strategy comes way back into the money because of the early volatility the other way.

    While it’s not perfect and you can’t predict what to do in advance, there are ways to offset, and even benefit from a runaway market – but yes, as I stated emphatically throughout, you’ve gotta realize the risks involved and manage the positions closely."