From a math perspective yes you are correct, but there's a big negative connotation associated with reverse splits. The split is often (ESPECIALLY in a leveraged ETF) self-defeating as the stock is subject to more and more downward pressure.
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I mean if a reverse split happens it obviously indicates the price has continued to tumble, but people make it sound like the reverse split itself is what will kill your investment.
Not sure if it applies to leverage ETFs but historically, stocks that split tend to go higher while stocks that reverse split continue to go lower.Brian Earl Spilner said:
I mean if a reverse split happens it obviously indicates the price has continued to tumble, but people make it sound like the reverse split itself is what will kill your investment.
I don't think people are indicating that. I think it's more that they're cautioning of the mindset that "it can't go that much lower, now must be a great time to buy" when in reality the reverse split (which has occurred quite a few times with BOIL) allows for continued decay (which if you don't understand the decay part, then you shouldn't be touching BOIL) as many have try to caution.
Brian Earl Spilner said:
I mean if a reverse split happens it obviously indicates the price has continued to tumble, but people make it sound like the reverse split itself is what will kill your investment.
The orange line is crude oil futures prices
The bar chart is UCO, a leveraged oil ETF. A reverse split can cause your investment to never recover. During the covid crash that saw oil trade at negative futures prices, UCO went through a 25/1 split.
BOIL follows Henry Hub though. I agree it will RS if it gets too low, but if the hub prices skyrocket later, BOIL will follow.ProgN said:Not sure if it applies to leverage ETFs but historically, stocks that split tend to go higher while stocks that reverse split continue to go lower.Brian Earl Spilner said:
I mean if a reverse split happens it obviously indicates the price has continued to tumble, but people make it sound like the reverse split itself is what will kill your investment.
It's a fun one to watch. Got tax info today and I can say BOIL was good to me last year.
Great day trade and swing trade devices, but not a great long term hold.
But decay is the culprit. Obviously it's not a good long term investment and the longer you hold the more unlikely to ever recover your investment.
But I'm still not in agreement that the reverse split has anything to do with that. The plummeting price of the underlying commodity and the decay alone will do that even if the reverse split never happens.
You're making it sound like a tail wagging the dog. (Reverse split being the tail.)
But I'm still not in agreement that the reverse split has anything to do with that. The plummeting price of the underlying commodity and the decay alone will do that even if the reverse split never happens.
You're making it sound like a tail wagging the dog. (Reverse split being the tail.)
I was just trying to demonstrate how decay works. Reverse splits are a by-product of decay as well as price changes.Brian Earl Spilner said:
But decay is the culprit. Obviously it's not a good long term investment and the longer you hold the more unlikely to ever recover your investment.
But I'm still not in agreement that the reverse split has anything to do with that. The plummeting price of the underlying commodity and the decay alone will do that even if the reverse split never happens.
You're making it sound like a tail wagging the dog. (Reverse split being the tail.)
Got it. In agreement then. I guess your first post about the skyrocketing cost basis threw me a bit.
Yes.
While we're on BOIL, it's spent most of February in the channel of 5.70-6.70. It's currently nearly back down to the bottom of that channel.
Will be interesting to see if bounces again from here.
Will be interesting to see if bounces again from here.
Agreed. I've done pretty well buying in the 5s and then selling in the 6.40 range.
Just looking now. It appears that market makers are feasting upon your premium.
You don’t trade for money, you trade for freedom.
hold it forever and just see what happens, lol
Looks like for 3rd time this week market gaps down lower and closer substantially higher. 4090ish is effing strong.
We may have discussed this before (good ol' Pelosi's) but does anyone trade based off of those trades?
I was wondering the same. How quickly is it public knowledge what they trade?
36 has to go on SPX for upside.
You don’t trade for money, you trade for freedom.
Uh, I guess you didn't actually read my post?perma Brew doomster said:
hold it forever and just see what happens, lol
Bullard just tried to send the market down.
What did he say? He didn't try, it looks like he did.
Looks like a come to Jesus moment re inflation.ProgN said:
What did he say? He didn't try, it looks like he did.
https://www.bloomberg.com/news/articles/2023-02-16/fed-s-bullard-open-to-half-point-rate-hike-at-next-meeting
Thanks
shall we go for round 4? hold or does it giveDan Scott said:
Looks like for 3rd time this week market gaps down lower and closer substantially higher. 4090ish is effing strong.
Tempted to try small lotto long here.
You don’t trade for money, you trade for freedom.
FED'S BULLARD: RECENT DATA HAVE MADE MARKETS REALIZE THAT THE FIGHT AGAINST INFLATION WILL BE A LONG ONE.
— Breaking Market News (@financialjuice) February 16, 2023
FED'S BULLARD: I WOULDN'T RULE OUT SUPPORTING 50-BP MARCH HIKE.
— Breaking Market News (@financialjuice) February 16, 2023
$30,000 Millionaire said:
Tempted to try small lotto long here.
Whatcha thinkin?
I wouldn't rule out supporting it...what a non-answerDan Scott said:FED'S BULLARD: RECENT DATA HAVE MADE MARKETS REALIZE THAT THE FIGHT AGAINST INFLATION WILL BE A LONG ONE.
— Breaking Market News (@financialjuice) February 16, 2023FED'S BULLARD: I WOULDN'T RULE OUT SUPPORTING 50-BP MARCH HIKE.
— Breaking Market News (@financialjuice) February 16, 2023
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Lol bought expiring xsp 412p for .15 at 1:30, sold for .8 at 2:15. Then they went over $2 itm. Oops
Edit...so ashamed of my paper hands
Edit...so ashamed of my paper hands
4110/4130/4150 butterfly lotto.
You don’t trade for money, you trade for freedom.
palogrande-ag said:shall we go for round 4? hold or does it giveDan Scott said:
Looks like for 3rd time this week market gaps down lower and closer substantially higher. 4090ish is effing strong.
My guess it bounces. I think next week is when we break down or up. I can see with mox things being weird tomorrow
Not gonna work most likely
4110 alone would've been a nice move. Up 66% a few minutes after you posted
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