Bought 1 million $SOXL in June, now only 200,000 left
It needs to increase 5 times to break even, would you still dare to bottom-fish? 🤯
Today a member sent their position: 10x leverage long SOXL, barely floating a profit of over 7,000 U, but already lost 26,000 before that
I just replied: If there's profit, exit first, don't hold too long
Why so decisive?
$SOXL itself is 3x leverage, plus 10x, equals 30x betting on semiconductors
What's more fatal is the double loss:
Leveraged ETFs rebalance daily, so in volatility and declines the principal is gradually worn down; contracts also require paying funding rates, the longer you hold, the more you lose
Moreover, the current downtrend isn't over yet
Stocks that fall a lot can be considered a margin of safety, buy more as they drop
Leveraged ETFs can't calculate a margin of safety, if they fall, they might never come back
It needs to increase 5 times to break even, would you still dare to bottom-fish? 🤯
Today a member sent their position: 10x leverage long SOXL, barely floating a profit of over 7,000 U, but already lost 26,000 before that
I just replied: If there's profit, exit first, don't hold too long
Why so decisive?
$SOXL itself is 3x leverage, plus 10x, equals 30x betting on semiconductors
What's more fatal is the double loss:
Leveraged ETFs rebalance daily, so in volatility and declines the principal is gradually worn down; contracts also require paying funding rates, the longer you hold, the more you lose
Moreover, the current downtrend isn't over yet
Stocks that fall a lot can be considered a margin of safety, buy more as they drop
Leveraged ETFs can't calculate a margin of safety, if they fall, they might never come back