Ha, I did the same thing with my 401k, had the thing maxed out by the end of Q1 thinking I was smart.

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.

and FOMC tomorrow, going to be interesting. Tons of energy built up in this range now.

perma Brew doomster said:

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and FOMC tomorrow, going to be interesting. Tons of energy built up in this range now.

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FOMC is 2/1, not tomorrow

This is kinda what I was thinking. Thanks.

Small cap Bios have been hot since year end. And today, TexAgs' favorite Bio nanocap has a bid - ELOX.

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

$30,000 Millionaire said:

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3820 has got some power

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That level was money today. Bought xsp calls on the touches and built out a couple free+ 382 flys. Good start to the year!

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!

BOIL is a 2x leveraged ETF looking at natural gas. Read up on pros/cons

https://www.investopedia.com/terms/l/leveraged-etf.asp

How short is short? A day? A week?

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.

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.

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?

Really neither. Math takes over with time.
https://seekingalpha.com/instablog/503677-autonomous-capital-management/1335991-the-simple-and-dangerous-math-behind-leverage-etfs

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?

Okay, that I understand.

Philip J Fry said:

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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?

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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.

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.

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.

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.

How does that work when you say roll contracts?

Unsure of this (I'm not a NG trader), but every +/- FLNG announcement has had a significant impact on NG futures.

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.

irish pete ag06 said:

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They also charge a 0.86% management fee.

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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?

Brian Earl Spilner said:

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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?

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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.