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24,637,568 Views | 233289 Replies | Last: 5 min ago by Heineken-Ashi
Ag CPA
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AG
Ha, I did the same thing with my 401k, had the thing maxed out by the end of Q1 thinking I was smart.
HoustonAg2014
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AG
I just rolled a lot of my shares from my IRA to my Roth on stocks that are down pretty big from 2022. Let's hope I didn't make a bad move. Figured it allows me to save up for tax purposes for next year as I told them not to withhold for taxes.
Heineken-Ashi
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Brian Earl Spilner said:

One thing I wonder about leveraged stocks like this...if enough people are trading it, is it possible it does start trading/behaving along those trendlines?
Absolutely. It's also 100% dependent on the action of natural gas futures. So a short term chart will mimick the futures chart. This has always been the case and anyone telling you otherwise has been wrong. But looking forward three months and trying to use technicals isn't going to work. Short term only. Never ever play it beyond very short term.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
$30,000 Millionaire
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AG
I'm going to need over 3815 on SPX to go long.
You don’t trade for money, you trade for freedom.
wanderer
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there ya go
Brewmaster
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AG
and FOMC tomorrow, going to be interesting. Tons of energy built up in this range now.
Triple_Bagger
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perma Brew doomster said:

and FOMC tomorrow, going to be interesting. Tons of energy built up in this range now.
FOMC is 2/1, not tomorrow
jimmo
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FOMC minutes will be released tomorrow at 1400

Brian Earl Spilner
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AG
This is kinda what I was thinking. Thanks.
La Bamba
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AG
Small cap Bios have been hot since year end. And today, TexAgs' favorite Bio nanocap has a bid - ELOX.
Brian Earl Spilner
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AG
Today would've been a good day to ride EGOC.
Charismatic Megafauna
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AG
Brian Earl Spilner said:

Today would've been a good day to ride EGOC.

I have a bunch! Only down like 70% on it now!
Charismatic Megafauna
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AG
$30,000 Millionaire said:

3820 has got some power

That level was money today. Bought xsp calls on the touches and built out a couple free+ 382 flys. Good start to the year!
wanderer
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Seems like we saw the recent range low/high all in one day (translates to ~3800-3900 on /ES). As mancini would say, the next move should be violent.

Put on a Jan 5 377p/383c strangle to try and catch it.
switzerland
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sorry for the amateur question. I'm older than most on this board and about 80% of my stocks are in blue chips and some relatively conservative mutual funds. Why wouldn't you throw some money at boil right now even if for the long term? The price is low and if you were patient shouldn't that come up again? I have about 20% of my investments in highly speculative high reward stocks so this seems like a fit. Enlighten me please!
emac0002
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AG
Because it is a commodity ETF that is leveraged. Commodities have to roll future contracts and nat gas is typically in contango which causes decay.

There are other factors that cause decay in the ETF. It should only be held for short periods of time.
wanderer
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BOIL is a 2x leveraged ETF looking at natural gas. Read up on pros/cons

https://www.investopedia.com/terms/l/leveraged-etf.asp
ChemAg15
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AG
How short is short? A day? A week?
techno-ag
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AG
Live dangerously. With a 3 month outlook it will hopefully go up.

(Or you could lose it all.)

ETA in all seriousness I'm in accumulation mode right now with BOIL.
emac0002
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AG
That really depends on the underlying asset. If the asset is moving one direction then it's fine to hold. If it "chops" in price action that's were decay can set in also.
Philip J Fry
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AG
I'll say the decay thing really confuses me. Does the purchased price change in your portfolio or does the decay come into play when you sell it?
wanderer
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Really neither. Math takes over with time.
https://seekingalpha.com/instablog/503677-autonomous-capital-management/1335991-the-simple-and-dangerous-math-behind-leverage-etfs
HoustonAg_2009
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NG will pop once Freeport LNG gets formal approval to resume LNG export.
emac0002
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AG
It's beta slippage.

IE. Price goes up 25% one day and down 20% the day after. In a 2x leveraged ETF. The ETF goes up 50% the first day and down 40% the second day. The underlying asset is back even however the 2X leveraged ETF price is 90% of what it was.
Brian Earl Spilner
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AG
I think decay is a little overblown when discussing these leveraged ETFs.

Unless you're planning on holding for literal years, isn't it fairly unlikely you'll actually profit less than you would with the underlying asset? (Provided you sell for a profit of course.)

I don't see how buying BOIL now and holding for even 6 months or so could possibly net you less than if you invested in nat gas directly. It certainly won't be 2x but it won't be less than 1x.

Unless I'm missing something?
Philip J Fry
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AG
Okay, that I understand.
irish pete ag06
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AG
Philip J Fry said:

I'll say the decay thing really confuses me. Does the purchased price change in your portfolio or does the decay come into play when you sell it?
The ETF's nav uses derivatives... so theta decay (the strategy they use would go to 0 on any day there was a -33% return for TQQQ)

They also charge a 0.86% managment fee.

So you lose $ in a flat market.
emac0002
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AG
The decay is real and can burn you. Also a big factor is BOIL has to roll contacts each month and natural gas is typically in contango, the futures price is above the expected future spot price. So you lose that jump in price difference.
Brian Earl Spilner
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AG
I get that it can eat a lot into profits, but as long as you hold until you're back in the green, aren't you almost always going to finish ahead of the asset itself? (Again, provided you're not holding for years.)

Edit: To clarify, I do get that the break even point on the underlying asset would climb higher over time, which makes it harder to get back into profit. I guess my point is it's unlikely to ever fall so much that you can't get back to profit on the leveraged. Especially on a commodity.
emac0002
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AG
A lot of this already priced in. Natural gas moves most with the weather and the injection reports. Natural gas is down because the weather is forecasted to be very mild til the end of January.
Brian Earl Spilner
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AG
How does that work when you say roll contracts?
HoustonAg_2009
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Unsure of this (I'm not a NG trader), but every +/- FLNG announcement has had a significant impact on NG futures.
emac0002
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AG
No. Nothing goes straight up or down. As it "chops" in price action you are losing due to decay.

So the price in the asset has to get higher and higher to break even in the ETF. The longer you hold the harder it is to break even as it goes down. If it was that easy I'd be a millionaire.
wanderer
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irish pete ag06 said:

They also charge a 0.86% management fee.
I've always wondered about the management fee/expense ratio of leveraged ETFs like BOIL and/or UPRO. If one is just day trading them I'm assuming the fee/expense is never applied?
Eliminatus
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AG
Brian Earl Spilner said:

I think decay is a little overblown when discussing these leveraged ETFs.

Unless you're planning on holding for literal years, isn't it fairly unlikely you'll actually profit less than you would with the underlying asset? (Provided you sell for a profit of course.)

I don't see how buying BOIL now and holding for even 6 months or so could possibly net you less than if you invested in nat gas directly. It certainly won't be 2x but it won't be less than 1x.

Unless I'm missing something?


I am very new to this stuff in general but when I decided to buy into BOIL I read into it what I could and my caveman brain interpreted decay as mostly a comparison versus a normal non leveraged holding over a long term. Mathematically and historically speaking a leveraged fund will return less (generally speaking) than a non leveraged one. I get the math of beta slippage and it explains how this overall lesser return happens over the lifetime of the hold but I think if the aims of the investor are basically dumping all at once for a single net profit, it shouldn't matter too much unlike someone using it to build their portfolio long term. Sure it may not be AS profitable as a normal stock CAN but if that is not your aim, and are ok with and keep up with the roller coaster rides, I don't see the real downfall either. It's a gamble for sure but if you treat it as gambling money you can survive without and have the discipline to not sell at a loss and ignore what that money COULD do in a normal fund, all is good, no?

I may have that completely wrong though. Wouldn't surprise me tbh. And I know there is a lot more nuance to it but the overall Clifs version is the above in my mind.
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