ETF's with a multiplier effect
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Feb 19, 2008 7:11 pm
I will admit I'm being lazy here, but I'm sure that many of you know the answer and I don't. Plus, my backoffice leaves something to be desired, so they aren't the best source of information. Thanks to anyone who takes a minute to answer.
1. What ETF's are out there that provide a multiplier effect, i.e. double the return of the S&P. I know that there are some double, but I don't know who and if any offer more than double. 2. I don't quite understand how they would work, at least to the downside. I understand that if I get in and the S&P is at 1400 and drops to 700, I get zero. However, If I got in at 1600 would it only have to drop to 800 to reach zero? What doesn't make sense to me is that the point where the investment is worthless is based on my personal entry point. Assuming they have a regular price which can be readily accessed, isn't there a point where the investment would reach 0? And can it go negative? If someone could tell me the correct name of these things I could probably google it, but I must be doing the search wrong because I get mostly irrelevant information.Thanks.
search: leveraged etf
Interesting article: http://seekingalpha.com/article/35789-the-case-against-leveraged-etfs