TZA

[Reub]

If we are about to enter a correction or worse, then one way to play it is with TZA, Direxion Daily Small Cap Bear 3X Shares. Any kind of a downturn would be rewarded handsomely with this ETF. (Up 5% today). 

[rocketdog]

You have to be super careful about these inverse 3x leveraged funds.  They are only intended to be held for a single day, so any attempt at a long-term gain would require daily trading.  It's gambling, pure and simple. 

[Reub]

Why only for a single day?

[melveyr]

Why only for a single day?

Well you can hold it for longer, but it is only meant to have 3x movements of the single days, not the weeks or months. If the stock market is down 20% over the next year, you can't count on TZA being up 60%. It will be a very different number. It depends how choppy the daily action was that led to that 20% decline.

[Reub]

TZA looking like an option? Up about 5% today.

[Pointedstick]

TZA looking like an option? Up about 5% today.

On the other hand, it's still down 51% YTD. And also down 32% from when you started this thread. 

[Reub]

PS, I never said that the time was right to buy it. I'm just seeing it as an option if someone believes that the stock market is ready for a downturn in a VP play.

Best Regards!

[Reub]

I am giving another hard look  at TZA for a number of reasons. First, "sell in May" is approaching rapidly. Secondly, mid-term election years are notorious for poor returns. Third, we have not had a meaningful, health-restoring correction of 10% or more for a number of years. Lastly, I believe that the federal government is propping up the economy for the purpose of increasing their advantage in the coming November elections, after which they won't care anymore. Is today's large stock selloff an indication of what's to come? Up 7+% so far today.

[tnt]

I am giving another hard look  at TZA for a number of reasons. First, "sell in May" is approaching rapidly. Secondly, mid-term election years are notorious for poor returns. Third, we have not had a meaningful, health-restoring correction of 10% or more for a number of years. Lastly, I believe that the federal government is propping up the economy for the purpose of increasing their advantage in the coming November elections, after which they won't care anymore. Is today's large stock selloff an indication of what's to come? Up 7+% so far today.

Reub, devils advocate here, you can make that case on any day.  Also, the market does not have to drop, it can move sideways in a choppy motion to absorb the QE 3 supported returns of the past multiple years.  TZA can only be viewed one way, a pure gamble since no one knows the future and there are two many variables to make it a calculated move.  I suppose the chances are 50/50, do you feel lucky?

[dualstow]

I miss Ryan Melvey and his wisdom. Hope he's doing alright.