Some of you industry insiders know of the subtle, but pervasive, moves by firms to limit the use of levered etf’s. At many brokerage firms, registered reps are not permitted to buy levered etf’s, without a written consent from the client, expressing full awareness that he will likely be wiped the fuck out playing with the devil’s tools aka 3x upside/downside etf’s.
At first, I was against banning the etf’s, due to selfish reasons. I am fully capable of trading The Great Fuckery, without getting 200’d to 2 inside of a short month. However, after speaking with numerous investors/friends about their experiences with those fucking products, I think the SEC should just wind down those black holes and eliminate them from the menu of bullshit that the average Joe and Jane intoxicate themselves with on a daily basis. Fact: people will NEVER fully understand how these products work, no matter how much Danny and Woodshedder explain the mechanics via spreadsheets. Joey Fuckoff, gas station owner from Jersey, does not have time to read iBankcoin.
I mean, really, it is incredibly irresponsible to launch 2x, 3x etf’s during this environment of deleveraging, effectively enticing the downtrodden retail investor into making big bold bets at a time when he can’t afford to lose anymore. Personally, I’ve refrained from using them for different reasons. Last year I found myself getting “cucumber lazy,” trading in and out of etf’s, while slacking on my research rituals. So, I made a conscious decision to lower the boom, by reducing my exposure to The RAPERY (FAZ, SKF, SRS, TNA, FAS), in exchange for singular publicly traded companies. What can I say, “The Fly” is olde [sic] school.
How many people bought SRS at $200+, went on vacation, then opened a brokerage statement showing an 80% unrealized loss?
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