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You will have only the latest stocks in it so a 10 year back test is too long. However the stocks falling out of the Nasdaq100 are nearly never used in the strategy as they represent rather the worst performing stocks and the strategy selects good performing stocks.
You can make your own strategy in QuantTrader similar to the Dow or Nasdaq strategy but use your own stock or ETF list instead of the Dow/Nasdaq stocks.
It’s not about leverage however if you write options you need much less of your money, so that you can invest a big part of your money in some very low risk cash like ETF like GSY to generate additional income. At today’s interest rates however, you can probably just leave it on your account.
The 15 volatility is the VIX level. Below, I would not write put options on equity like the S&P 500. This does not apply to GLT and TLT.
As all three ETFs do have very liquid options so that you can just roll or buy back the options to reduce portfolio delta. I would not do it too often, and wait that portfolio delta increases or decreases by about 20%, before you adjust.You are right! I forgot to delete it. The 70 day look back period only matters for new companies. I will fix it by tomorrow. Thank you.
I do not think this would make much sense to preselect dividend ETFs manually. We already have in the Nasdaq100 and Dow30 strategies low volatility sub-strategies. The stock data we use is dividend adjusted which means that it will show you the total return of a stock including dividends. Many dividend stocks will be selectes in the low-volatility sub-startegies of the Dow or Nasdaq strategies. You can also see the stock selections and returns of these sub-strategies if you go for example to the Dow strategy, then click on “allocation by strategies”, then select the “Dow 30 strategy balanced” which ist the unhedged strategy.
Here you see that this strategy will switch between:Description
The Dow 30 Strategy balanced has historically invested in these strategies:
DOWlv
DOWuNow you click on the DOWlv (for low volatility) strategy. This is more or less a blue-chip low volatility dividend strategy.
Regards Frank
No, this is not easy. You can download old versions of QuantTrader together with the old strategies, but this makes not much sense as you will get many errors because of ETFs or stocks of companies which do not exist anymore. Nearly all strategies changed over time some just because the hedging strategy which is used by nearly all strategies was updated with additional ETFs. Also, the Nasdaq and Dow strategies change because new stocks are added, and some ate falling out of these indexes.
Can you email me ([email protected]) your zipped ini file folder and the name of the strategy with the error so that I can reproduce this error.
For most strategies it makes no sense to rebalance more often than once a month. This can be backtested and is quite significant. The reason is that the shorter your rebalancing intervals are the mor you risk to rebalance every small bump with most of them being just noise. Doing this means that every time you sell low and buy back high. This is also why day-traders normally don’t make money on the long run as they try to see patterns in random movements.
Longer rebalancing periods capture real market changes. You can set up weekly semi-weekly or monthly rebalancing in QuantTrader.Please just skip the error. We are working on this. Anyway there are no new strategies. Regards Frank
The Nasdaq strategy was able to select value stocks (energy, pharma, consumer..) during 2022 instead of the usual FAANG high-flyers. This was the main reason for the better result. The same was the reason for the Dow30 and the sector rotation. All these did switch to defensive value stocks. The hedge did not help too much last year as Treasuries and Gold did not perform well.
The Nasdaq low-volatility sub-strategy has a lookback period of 70 days, so we must wait 70 days with the addition of new stocks to make sure that they have been in the Nasdaq during the whole lookback period.
You can try to short VIXM which is the same as VXZ. Another possibility is to short the 5 month away VIX Future (about May) right away. The problem is however that they are worth Vix x 1000 so that the minimum investment would be about 25’000$ for the May future.
Regards FrankThe strategy was profiting from the strong US$. The strong US$ was probably the only asset class which performed well in this inflationary environnement. I am myself not a big fan of such “currency” strategies as everything depends only of some rather random FED decisions which makes it difficult to predict.
Regards FrankI have updated the strategies on our server. Everything should work again by today or latest tomorrow. BTC and ETH prices seem to come in correctly from EOD.
I rather think that Treasuries will again be a good addition in the future as we are near the top of Fed rate hikes. For equity, I think that we are back to a market where stock or sector picking makes the difference. This explains also that the Dow, Nasdaq or the Sector strategies did best this year. The time where you could not beat a straight S&P500 investment is probably over.
Regards FrankI see that there is a problem with Yahoo. On the Yahoo website the charts also are not up to date. I will switch to EOD for BTC and ETH. They have updated prices. I just tried it. I will update it today or tomorrow morning.
Regards FrankNo, there is just the chart, but you can select every year and see the difference to the benchmark. I think this is much better because by comparing the charts you can also judge risk / volatility
Here is a QT version with updated strategies. We will use these versions by next month
https://1drv.ms/u/s!AlbnOmAnxNETgYWrcXiobaAMur7cxAY?e=c1OLK4
Here is a new version of the strategy with Fx instead of CROC. You can try it if you copy these 3 ini files in the Quanttrader ini folder.
https://www.icloud.com/iclouddrive/071bwGkPWsHqMm8WaLYbvS7GA#GLD_leveraged_new
There is no replacement anymore for the 2xshort CROC ETF. Best is to sell 2x the value of the Fx AUDUSD or sell 2x the value of the FXA ETF. Selling the Fx AUDUSD would be the better solution.
I will have to make some changes to this strategy.Hello Howard. I would be very interested to look at your strategy. Can you zip and send the ini files to [email protected]? I will have a look at it next week when I am back from my holidays. There may be a possibility to also include weekend prices. QT uses a symbol (we use SPY) in the system settings to define normal trading days. If a strategy symbol then has additional weekend trading days, these are just skipped. Perhaps you can just use some Bitcoin/currency symbol instead of SPY to add the weekend days.
Our current strategy has a Hedge which is TMV (3x leveraged Treasury) or AGQ (2x leveraged Silver). It would not work to combine crypto ETFs with our normal hedge because of the huge volatility difference. We use risk weighted return to decide which is the better investment and this only works if volatilities are similar. The only ETFs for Treasury or precious metals which come close to the volatility of Crypto Coins are these leveraged ETFs
I am invested in Light Crude Oil via the CL Future. Instead of buying CL right away I sell delta 30 CL put options about 30-45 days away and I roll these if they reach 80% profit or loss. The premium paid by these options is very high.
These commodities are in general highly correlated and differently to equity they only rise for short periods. Most of the time they go down all together. So, to make a working strategy you need to include some other assets for these long down periods. Equity is good as equity normally goes up 80% of the time and only goes down fast 20% of the time.
In general, I don’t think commodity is good as a permanent investment because of the high underlying Future roll losses.You are right, in combination with other asset classes commodities may be a good diversification. This way for most of the time you will be mainly invested in equity but you can still profit from the relatively short periods commodity prices are rising. In order to reduce volatility a good addition are ETFs like DBC, DBB and DBP.
Some of the above commodities im my list have very high volatilities 40+% so that you should use SRRP mode (risk parity) if you do a Top x commodities strategy. In general strategies work best if the different assets have similar volatilities.I already tried to build strategies which selects the top ETFs of the below list, I could however never find any strategy which really worked. The reason was the very high correlation of all commodities and the fact that most of them have commodity Futures as underlying which are most of the time in contango due to high storage costs. Due to this contango each future roll is expensive and if you look at these commodity ETF charts, then they all tend to go down over longer periods.
Regards FrankGLD, Gold
SLV, Silver
JJC, copper
USO, US Oil
PPLT, Platinum
PLTM, Platinum
UNG, US natural gas
CORN, corn
SOYB, soya bean
WEAT, wheat
COW, livestock
JO, coffee
KRBN, carbon
NIB, cocoa
JJN, nickel
BAL, cotton
JJU, aluminium
JJT, tin
GRU, grain
LD, lead
FUE, BiofuelIt should not crash. Can you send me the ini folder or ini file of the strategy which crashes so that I can try? Can you email it to [email protected]?
Stock lists can be imported from a text file with just the symbols on each line.
They are saved in the ini file of the strategy in the stock list section
[StockLists]
$Nasdaq100=1,1,0.00,AAPL,ADBE,ADI,ADP,ADSK,AEP,ALGN,ALXN,AMAT,AMD,AMGN,AMZN,ANSS,ASML,ATVI,AVGO ………If you change the symbols after $Nasdaq100=1,1,0.00, then at the next start QT will repair the file and use the new symbols. This is an easy way to change the list. You just have to make sure that you replace this list in all strategy (ini) files which use this list.
You can also just make a new list with the list editor and then edit the strategies in the strategy manager so that they use the new list.
Regards FrankThis would be quite complicated to implement and anyway I don’t think it is good to select specific periods. For example optimizing only for a bull period like 2009-2021 will inevitably give you a strong bias for equity. You could do some tests with our walk forward feature (attention buggy beta version) which will for example change the volatility attenuator or the lookback period over time going forward. But as we found this will not really increase performance and mor or less you will always get about the same settings as when optimizing for the maximum period.
The reason or this change was that we always wanted to be hedged even if there is a sudden crash after a long bull period. Allowing a 100% SPY allocation we would have no hedge during the Covid crash and also during the 2018 December crash. There is nearly no difference between 60% and 100%. 2018 drawdown was 6% with the actual 60% setting and 10% with the 100% setting.
It only applies to the returns. Volatility stays the same. To inverse sort order insert -200 Mean reversion weight (100-200=-100) and 100% Mean reversion period
The intraday bug is fixed in the newest version. When starting the last 523S then you should be prompted to download this new version, if not you can download it directly.
https://logical-invest.com/quanttrader/QuantTrader523S.exe
Regards Frankyou are right, there seems to be a bug. If you load intraday without checking the reload button, then it seems to work and loads the current day, however with reload checked it stays on the old day.
I also couldn’t download Data from EOD a moment ago. On startup I switched to Tiingo to reload the data and this worked. Seems to be a problem at the EOD data supplier
Try to reload the stock data again. I checked with the latest version and I have the same allocations as in the website.
I update the list about all 3 months. It makes no sense to do it more often as anyway new additions will not be selected until they exist at least for the lookback period of the strategy.
Here is a new 530S version which should remove this bug. Please try it.
https://logical-invest.com/quanttrader/QuantTrader530S.exeI see the difference between weekly and biweekly and am looking at the problem now. For the rebalancing the allocation in the Actual tab is the right one. The difference is that biweekly already updated the invested tab and weekly not. I will fix this and send a new version.
By “not updating” did you mean that also the actual tab was showing also the old allocations?
Over the weekend you have actually still been physically invested in the old allocation, which is why then only the “Actual tab” shows the actual investment. Once you physically do the new rebalancing on Monday, from then also the Invested tab shows the new allocation.This is an interesting ETF. However not much history to do backtests and i did not find any backtests even on the invesco web site. I will however do some tests with it.
I think you can trade MES without any problem. The Future and option ask/bid prices are the same as for ES, only the multiplicator is different (5 versus 50). The volume is not important as this is in fact the same Future as ES
In my option example I am also 100% invested like with ETFs. I sell lower delta options, but I sell more of them to compensate the lower delta.
Why not do this. Personally, I am not a big fan of stock picking. As the FAANG stocks make about 45% of the Nasdaq valuation, anyway it was difficult to beat QQQ with single stocks other then the FAANG stocks. The problem of good performing single stocks is that they behave like a leveraged version of QQQ. So if you invest in these, you even if they go up fast, your risk is several times higher. Oputperforming is not always better. It depends from the risk. Most people do not understand this. Stockpicking also makes not much sense in today’s markets where company fundamentals are of no interest anymore to the investors. I personally prefer strategies which invest in big indexes like the US market strategy
At the moment using options adds nearly 1% per month to the CAGR of the underlying ETF strategy. If volatility goes down to the previous low levels then we will probably get at least 0.5%
I sell delta 0.3 put options but about 3x the quantity so that this option position has the same effect as a ETF position. In IB you can display the “portfolio delta $” value of such a position and this must be the same as you would have for an ETF position. The only way such an option position has perhapy a slightly lower immediate hedging effect is if volatility spikes. This however is not really an issue as you know that you will get this back rather quickly if volatility drops again.
Concerning the ES options I first sold delta 0.7 put options but later switched to the combination of a Future and a 0.5 option as it is simpler to control your total portfolio delta by selling Futures in a crash as by selling the options as Futures have a very small spread and low commissions.
Practically -2x delta0.75 put options are more or less the same as 1x ES Future and -1x delta0.5 putI do not have to simulate long periods because the strategy itself is backtested in QuantTrader. I only need to simulate difficult market situations and make sure that I get at least a similar result with options as with ETFs.
During normal market periods options always provide better returns but nearly all option investors underestimate the risk of some of the most popular option strategies during difficult market periods. The result is that most lose money and have to learn this the hard way. With OptionNet you can manually place trades and test what would have happened during such difficult market periods.Here is a link to a document explaining the option based Permanent Portfolio Strategy
https://www.dropbox.com/s/40694ckbvoxf7hz/A%20Low%20Volatility%20Option%20based%20Permanent%20Portfolio%20Strategy.pdf?dl=0Yes, this is no problem. Personally I run my private account with a 2x leverage with the goal to reduce negative interest rates I have on my Swiss Franc account. So I only have 50% of the money at IB and the other 50% on my Swiss UBS account where I do not have negative interest rates until now. Even with a 2x leverage I arm only at about 50% margin.
In the past I saw that it takes only 24h to transfer more money from UBS Switzerland to the IB account if this would be necessary.I need to check this next weekend. I think during the weekend you should see the old existing allocation as invested and the new allocation in the actual tab
The problem of the MPP precious metal strategy is that it only works with 3 metals and two of them Gold and Silver have a very high correlation. In fact, Silver is a sort of 2-3x leveraged Gold with a much higher volatility. It is always difficult to combine assets with a very different volatility in a strategy.
I tried myself to build commodity strategies with many more ETFs adding for example copper, platinum, palladium, zinc, lead, nickel and also strategies with wheat, soya, lifestock …. but I was not able to achieve much better results as most commodities are quite correlated. It is probably better to build a strategy with baskets like precious metals, industry metals, grain (corn, wheat, soya ..) as the single components can show huge spikes which are of a big risk to any strategy. A problem is also that some of these ETFs have a very short history which makes the backtest results quite unreliable. There is quite some additional research necessary to find a stable more or less working strategy.The weekly allocations are fixed with the Friday closing prices. From then, nothing will change until QT gets the next Monday closing prices. For QT only trading days exist but not weekends.
In this case you could also buy just about 40% of UBT because duration acts like a leverage. Best if people fear inflation are inflation protected Treasuries (TIP)
I agree that the treasury performance was not good these last months, but this is probably rather a sort of mean reversion after the incredible performance during the covid crash March 2020. Rates will most probably stay low for the next years, but people seem to fear that inflation is picking up with all this additional covid spending. A sign is that in the non leveraged strategies the TIP (Inflation protected treasuries) since some time outperform normal treasuries. There are a lot of factors which the strategies do not know about. They did not know about the senate elections in Georgia or that Biden will probably boost infrastructure spending so we have at the moment a lot of artificial influences on normal economic cycles. The UIS strategy is mainly a minimum variance strategy seeking to minimize risk which allows even zero allocations for single assets. In these difficult markets I would probably rather prefer a strategy like the US market strategy which combines Gold and Treasuries into a hedge which can get a maximum exposure of 60% and so equity always stays at a minimum of 40% exposure.
But anyway, I will have a closer look at the strategy and see if it is better to restrict these allocations a little bit more like we did it in the more modern strategies.The biggest difference is that the UIS strategies look at the 3 assets (equity, gold and treasuries) as independent assets and can scale every asset to up to 60%. So, it is possible that it totally excludes one asset. The US market strategy follows a slightly different approach by pairing gold and treasuries into a hedge which in total can only go to 60%. This strategy has always a minimum of 40% in equity and is therefore slightly riskier if there is a big market correction. I personally prefer this more modern approach.
I agree that excluding treasuries would have been good for the last months, but backtests show that it is better to keep such an asset even if it is a drag because it reduces volatility or risk. So called “switching strategies” which invest only in the best asset and exclude the other work normally well for some time, until there is a sudden market correction, and then you will be at risk because you are without any hedge.
Backtested over the last 30 years permanently hedged strategies always performed better than switching strategies.I can not imagine the reason for this error. Does QT start if you copy the old 227S version into the same folder? Do you run the new QT version on the standard LI set of strategies or on your private strategies? If the errors persist, then please zip the whole ini folder and email it to me at [email protected]
I whish you a very good new year 2021!!!
Regards FrankI normally do the new lists first in Excel and save it as a csv file which is a comma separated text file. Now it is quite simple to create a new Stock list in QT and import this csv text file. Make sure you use the latest QT version which I published 2 days ago because the older versions had a bug in the list manager. This could be the problem you experienced. If there is a problem in a strategy, then it is disabled. It is still there and after fixing the problems you can enable it wit the enable/disable checkbox.
Best is to copy a new stock list to the strategy and then delete the old one.The intraday price is the 15min delayed price, the same as shown at yahoo finance on the iPhone stocks app. The price is only saved internally, the data files safe only eod prices. I checked the intraday prices in the consolidated window and thy match the prices of the iPhone or iPad app.
In QuantTrader you can open the „ranking log“ page on the left side to see all historical allocations
In older Quanttrader versions there was a bug which allowed to add an ETF without additional parameters like data source or currency. This is fixed in the newer versions of QT and if QT finds some incomplete ETF or stock data it automatically fixes these errors.
Shorter rebalancing periods reduce the performance of most strategies as you begin to rebalance for short term corrections which are mostly just random noise. This means that you sell low and buy high and miss the normal rebound after such fluctuations.
It is more or less the same. EOD offers also international stock prices. Tiingo only US stocks and ETFs. But we have these 3 options also for security reasons for the case that one stock price server is temporarily down.
It is normal for hedged strategies that a part of the assets go down when others go up. This reduces the volatility (risk). Year to date gold was by far the best asset followed by treasuries and equity. For most investors, equity performance is still the benchmark and they feel bad if they partly miss an equities rally, but long term it is more important not to lose your profits during the next market corrections. You can be sure the next correction will come and then Treasuries and gold will probably again safe your portfolio as it did during the march corona crash.
In a sideways up and down market these leveraged ETFs will show some rebalancing losses. However, in upgoing or down going markets the leverage is an advantage. So, for example, when Gold is 20% up within a month like in July, then the leveraged ETFs will profit more than a position made of 2x or 3x the amount of unleveraged ETFs. Same for big monthly drops. Here in fact your losses are limited on the value of the ETF. I would say that most of the time using leverage is an advantage.
As the last “end of day” prices are from Oct 30, it still tells you what you have been invested in October and what is the new November investment based on the month end Oct 30. prices.
The next week will probably come with high volatility which always also means increased risk. It is probably better to avoid this risk and invest later.
We just don’t know when money goes to cash rather than in these assets. So best is to just stay invested so that you do not miss it when people are getting greedy again and invest their money. All these periods averaged gave always a good return in the past.
Many investors go to cash before the US elections. You can see this as all 3 asset classes (equity, treasuries and gold) show negative performances for the last 3 month which means that money flows out of these assets. This is because nobody knows exactly which asset class will profit for the next 4 years. Normally money always flows into at least one of these assets. The situation should clear up next month.
This is probably rather a healthy correction after Gold and Treasuries had an incredible performance this year.
Yes, you get the dividend if you roll the Future in the next one. The December Future is 3370 and the next March Future is 3360. The dividend is in the 10 point difference =0.3% between the futures. Because of the dividend further out Futures are cheaper.
Futures Price = Stock Price × (1 + Risk-Free Interest Rate – Dividend Yield)Here is a new QuantTrader528S version which fixes the Excel copy paste error. I also removed the $ sign in the cells so that now all numbers are also pasted as numbers.
Here is a download link for the new version.
https://www.dropbox.com/s/944cs5o8aeenauk/QuantTrader528S.exe?dl=0I personally prefer to use Futures to invest in SP500, Gold or Treasuries. For SP500 you can buy or sell ES or MES Futures. For Gold GC or MGC Futures and for Treasuries the UB Future.
The advantage is that with Futures I don’t keep US$. I can leave the account in Swiss Francs in my case. Only the profits accumulate in US$. Another big advantage is that I can work with leverage and keep most of my money on my Swiss accounts. This way I pay less negative interest, which is about -0.85% for SFR and -0.75% for Euros.
A big improvement for smaller investors are the Micro Futures MES and MGC. They trade at exactly the same price as ES and GC but have a 10x smaller multiplicator which makes it much simpler to allocate these assets.VXX has about a 4x higher volatility than TLT or TAIL. It is very difficult to combine such different assets in one strategy. You will not find a setting where QT is able to switch in time to the best asset. Mainly VXX is the problem as it tends to go constantly down until a market correction happens. No way to use the past performance to allocate it before a crash. VXX is something for day traders as you should keep it only for short time. Normally if VXX had an up spike resulting in a good performance, QT would perhaps allocate to VXX. But then it is already too late because VXX always goes down very fast if volatility drops. TAIL may sometimes be flat or even go up as it buys OTM puts and profits from Treasury performance, but also for TAIL the real profit component is not the put options but the Treasuries.
I see that there is a problem because of the missing symbol name. I will have a look on it and include a fix in the next published version
Hello Richard. Your approach sounds interesting and I would very much like to have a closer look at it. Specially the precious metal strategy is interesting. Would you mind sharing the strategy? Normally best is to zip the ini folder and share a download link (Dropbox Onedrive …)
Regards FrankI am not a fan of VXX because if you keep it, then you will always lose money and timing is difficult. Better use long term treasuries like TLT which have a negative correlation to equity and will so reduce volatility. To increase income you can sell calls (covered call) on your position after a treasury spike due to a market correction. This works specially well because inverse to equity, TLT volatility increases when TLT spikes up and in such cases you can sell some calls and cash in a good premium. This way you have a very safe investment which produces quite a good income because of the covered calls. It’s a strategy I personally like to do, however I only do it, if TLT volatility (symbol VXTLT) is higher than about 14. Also I only “cover” about half of my position with calls.
I have to say that instead of doing a covered call which is to buy 100 TLT ETFs and sell 1 ATM (1 month) call, I prefer to write just 1 ATM (1 month) put instead. This is exactly the same but needs one trade less.The TLT yield is still 1.7% and the FED just told us that they intend to let the rates low for the next 3 years which reduces the downside risk of our 20+year TLT ETF. Rates can still go further down by up to 2% if the US would install negative rates as we have them in Switzerland. Also due to its mostly negative correlation to equity TLT is dampening your portfolio volatility/risk a lot. So, all together treasuries like TLT are a much better addition than cash for your portfolio.
I have uploaded the corrected strategy. Instead of 16% HAUD the investment is 16% SPLV. The rest is the same.
This is not possible at the moment, as it would need a second analysis run which is not easy to implement. We only rank performance and volatility at the same time by using the modified Sharpe. I also don’t think that this would be a good approach, as for this top 5 stocks volatility would be in fact mostly a positive (rising prices) volatility.
Regards FrankJust as a normal strategy ranks stocks or ETFs, a strategy may also rank strategies. If a strategy ranks strategy, then we call it a meta-strategy. For QuantTrader a strategy is not different from an ETF. Both result in a historical chart which can be used to build a new strategy.
Fundamentals like yield for treasuries P/E for stocks or production cost for Gold don’t make a big difference anymore. There is so much money floating around, that any asset begins to rise once the money begins to flow in it. By having stocks gold and treasuries you can be nearly 100% sure that one of them is rising as money has always to go somewhere.
Sure, you can use ES, UB and GC Futures as a replacement of SPY TLT and GLD. This has also a huge advantage for non US$ accounts as you avoid currency risk.
Normally during periods of raising rates, Treasuries and Gold will not do well. We experienced this from 2016-2019, so this can be quite long periods where a cash like alternative is the only way to reduce losses.
Quarterly rebalance would have failed during the 2000 Dotcom crisis where the Nasdaq lost 80%. The 3x leveraged Nasdaq ETF would have lost 100%. Including this in the backtest would probably change everything. Starting just after a 80% correction with a backtest adds a huge recovery bias.This month the allocation is 30% SPXL, 50% TMF and 60% GLD (= 140%)
using UGL instead of GLD is 30% SPXL, 50% TMF and 30% UGL (=110%)You just have to divide the GLD percentage by 2 to get the UGL allocation because UGL is 2x GLD
Here is a link to the ini file:
https://www.dropbox.com/s/z2sp7e0u541w1cr/Extreme%20TQQQ%20TMF%20UGL%20SR3%20RQ%20L170_20200730115406_LI.ini?dl=0It makes no difference as dividends are always anticipated in the stock or ETF price. If this would not be the case, then you could buy a stock one day before dividend payment and sell it one day later with a big profit.
Best is to trade directly Forex USD.JPY (IB symbol). You would have to buy 2x the amount in US$ as YCS is a 2x leveraged ETF. Even if YCS has a low liquidity, the underlying is extremely liquid and Proshares always ensures a fair price and small spread. Liquidity should never be a problem for currency ETFs
Silver is not really a good hedge as most of it is consumed from the industry. During longer market correction normally industrial silver consumption drops with production which suppresses the silver price. Also, silver is dangerous to keep due to the 2-3x higher volatility than gold. Gold has not much industrial use. The main purpose is preserving wealth during inflationary periods when the dollar loses value and central banks print money like crazy.
The good thing is that by investing for example $33,000 in the 3x leveraged TQQQ you have the same exposure as investing $100,000 in QQQ. However, in the case of a really bad “black swan” event like a nuclear bomb exploding you only risk these $33,000 while with QQQ you have $100,000 at risk.
Leveraged strategies are a good way to limit your risk if you keep the other part in cash.Yes DGP and UGL are both 2x Gold. You can always replace an ETF with another if the underlying is the same.
You cannot calculate like that because the two strategies making the 87% also have always a 40% Hedge but they are 2x leveraged. So, you cannot really say how much you can lose. All together there is about 50% of this strategy in equity which you will lose if the market goes down 50%. The rest is in Treasuries and Gold which should go up in a market correction.
