ASX- ETF : Betafunds

[JBmurc]

https://www.betashares.com.au/fund-list/fund-overview/


Great way to diverse one's ASX portfolio

Have held BBUS.asx before and plan to hold again as I really think we can't be far away from a sizable correction esp in the US markets

[blackcap]

https://www.betashares.com.au/fund-list/fund-overview/


Great way to diverse one's ASX portfolio

Have held BBUS.asx before and plan to hold again as I really think we can't be far away from a sizable correction esp in the US markets

The thing is though... will the ASX correct? They have gone no where since 2007-2008 whilst all other bourses have doubled or even better?
Serious questions.

Sorry, thought you were referring to BEAR or other ASX shorts. I see BBUS is based on US stocks.... thanks for the link :)

[JBmurc]

The thing is though... will the ASX correct? They have gone no where since 2007-2008 whilst all other bourses have doubled or even better?
Serious questions.

Sorry, thought you were referring to BEAR or other ASX shorts. I see BBUS is based on US stocks.... thanks for the link :)

...Yes I'm trying to take a 50k AUD position in BBUS.asx (which is a leveraged 2-1 short against the S&P500)

I agree the ASX won't be as badly affected percent wise as the bubble US markets

https://www.youtube.com/watch?v=vJu_xV0zscE

https://www.youtube.com/watch?v=ed0TXsGN3wc

[blackcap]

...Yes I'm trying to take a 50k AUD position in BBUS.asx (which is a leveraged 2-1 short against the S&P500)

I agree the ASX won't be as badly affected percent wise as the bubble US markets

https://www.youtube.com/watch?v=vJu_xV0zscE

https://www.youtube.com/watch?v=ed0TXsGN3wc

Good luck with the short. Are you aware of the citiwarrants products that also allow you to go short on a wide variety of instruments and options availaiable? Traded on the ASX as well. I have gone short WOW. (woolworths)

They allow you to short a variety of indexes, commodities and stocks. So possible to short nasdaq, hangseng, Dow etc but also a bunch of Australian stocks.
https://au.citifirst.com/EN/search/MINIs#&&c2eqPg30pXjVNLLtYPLERZJhZBxySYjJbSldALvOkTgrXoOp/uhD/m0i/+hPF//sAwO3WRGueym5BpESnfqWunmLsO5Xn3geG20+U4z3g7K2i4Lfm iG01p/5WRbh+PGo7V0gihm+suQnpFNpk3F/9j3AV58=

[JBmurc]

I did for a short period of time did some CWA warrant trading .......high risk to reward as spreads where large ....my helpful CWA broker certainly made it easy for me to invest and blow cash..and in the end after blowing 8k AUD we both agreed the Warrant market was really taylormade for the BIG 100k+ orders where their spreads where far closer ....I always rememeber the term "Time value" and even if I called a move correct the time value would eat any profits and leverage my losses ....personal I hate CFD,Futures,Warrants.... only cause I have been burnt too many times..... Much rather trade ords , fixed date opts , and ETF's

[blackcap]

I did for a short period of time did some CWA warrant trading .......high risk to reward as spreads where large ....my helpful CWA broker certainly made it easy for me to invest and blow cash..and in the end after blowing 8k AUD we both agreed the Warrant market was really taylormade for the BIG 100k+ orders where their spreads where far closer ....I always rememeber the term "Time value" and even if I called a move correct the time value would eat any profits and leverage my losses ....personal I hate CFD,Futures,Warrants.... only cause I have been burnt too many times..... Much rather trade ords , fixed date opts , and ETF's

No worries, I understand where you are coming from. Although most of the Citiwarrants have market makers and there is only a 2 cent spread. Ie in my WOWKOP buy the spread was 245 247 and I bought at 247. But if its not for you its not for you. I am in no way involved with Citi, just was unsure if you knew about the products. The thing is with BEAR and Beta products etc there is still a spread that you need to take. I guess to avoid the spread (or impact on trading) its best to take a longer term view and stick with it rather than try to day trade the warrants etc as that is just a losing strategy. You are correct on the time value bit. It does eat into your profits... thats the price we pay for the leverage provided :)

[JBmurc]

No worries, I understand where you are coming from. Although most of the City warrants have market makers and there is only a 2 cent spread. Ie in my WOWKOP buy the spread was 245 247 and I bought at 247. But if its not for you its not for you. I am in no way involved with Citi, just was unsure if you knew about the products. The thing is with BEAR and Beta products etc there is still a spread that you need to take. I guess to avoid the spread (or impact on trading) its best to take a longer-term view and stick with it rather than try to day trade the warrants etc as that is just a losing strategy. You are correct on the time value bit. It does eat into your profits... that's the price we pay for the leverage provided :)

Yes for sure was some time ago 2007-9 etc ... going from painful memory's .... was always more expensive to buy the good warrants ..esp if like me I was only keen on putting in 5-6k at a time not much to pick from ....yet if I had say $60-$100k he could get me much better warrants.. with less time decay better entry price ..etc

From my personal experience unless you're very skilled with deep pockets then leverage is best to be avoided ...

Got enough leverage as it is ....with the bulk of my trading funds a mix of IRD(GST) or Westpac Banks (4.49% p.a) ......

here's a marketing piece from the CWA guys - https://player.vimeo.com/video/19242274

[JBmurc]

Advantages of - beta ETF's -BBUS.asx

Access – obtain magnified returns that are negatively correlated to U.S. sharemarket as simply as buying any share

Convenience – investors avoid complications and costs of CFDs, futures and short selling

No margin calls for investors – cannot lose more than initial investment

No W-8 BEN forms and no US estate tax implications for investors – simplified tax administration, unlike cross-listed alternatives

Reduced currency risk – US dollar exposure hedged to the Australian dollar

Liquidity – available to trade on ASX like any share


....yes the fee is 1.2% p/a

[Lizard]

This article by Jared Dillian is worth a read in regard to leveraged ETF's and the "beta slippage" that is created by the daily re-balancing of the ETF:

https://www.bloomberg.com/view/articles/2017-03-23/sec-may-regret-the-day-it-allowed-leveraged-etfs

In my case, I tried BBOZ for a brief time and was reasonably impressed at the speed with which I could lose money on it. Any suggestions on ways to short these leveraged ETF's would be good.

[JBmurc]

This article by Jared Dillian is worth a read in regard to leveraged ETF's and the "beta slippage" that is created by the daily re-balancing of the ETF:

https://www.bloomberg.com/view/articles/2017-03-23/sec-may-regret-the-day-it-allowed-leveraged-etfs

In my case, I tried BBOZ for a brief time and was reasonably impressed at the speed with which I could lose money on it. Any suggestions on ways to short these leveraged ETF's would be good.

Not sure if you could short an ETF ? guess so as its traded like a share best to check with your CFD provider....
Going from the charts they will certainly move just need the right direction ...aka if the ASX continues to tick higher your of course going to lose on a leverged Short ETF

[kiora]

Welcome back Liz.Your posts where sorely missed

[kiora]

This article by Jared Dillian is worth a read in regard to leveraged ETF's and the "beta slippage" that is created by the daily re-balancing of the ETF:

https://www.bloomberg.com/view/articles/2017-03-23/sec-may-regret-the-day-it-allowed-leveraged-etfs

In my case, I tried BBOZ for a brief time and was reasonably impressed at the speed with which I could lose money on it. Any suggestions on ways to short these leveraged ETF's would be good.

Definitely worth a read. Agh ! The cause of the next GFC when they try to unwind them???

[JBmurc]

Definitely worth a read. Agh ! The cause of the next GFC when they try to unwind them???

Interesting reading ....a good comment post on the article

1. The trick with leveraged funds is to invest during periods of true low volatility, i.e., when you expect the market to either consistently go up. Or down, if investing in inverse funds.

2. "Look, the whole point of Wall Street is to have a transfer of wealth from the unsophisticated to the sophisticated." That is extremely un-American and, if true, we might as well turn to communism. Democracy and capitalism has no future in a land of thieves and idiots. Think about that the next time you consider investing on the advice of idiot stock brokers like this author.

[kiora]

Definitely worth a read. Agh ! The cause of the next GFC when they try to unwind them???

More pouring in
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11940210

[showstring]

shorting the index that's only now breaking out from a 30 year lull? good luck to you sir

https://youtu.be/Bx36hZg3BIA

[JBmurc]

I haven't taken a BBUS position yet ... but certainly, keeping it on the watch list .... easy credit ultralow interest rates has been the driver of the markets ...how much larger can we tap DEBT to growth is the million dollar question... if we keep dropping rates I guess we can continue the madness ..get to a point where you make money on having debt and lose if your saving is that the future plan? or will we have a huge correction and wipe a ton of debt and see interest rates back and sane levels

[kiora]

I haven't taken a BBUS position yet ... but certainly, keeping it on the watch list .... easy credit ultralow interest rates has been the driver of the markets ...how much larger can we tap DEBT to growth is the million dollar question... if we keep dropping rates I guess we can continue the madness ..get to a point where you make money on having debt and lose if your saving is that the future plan? or will we have a huge correction and wipe a ton of debt and see interest rates back and sane levels

I agree with this JB. Just when???

[JBmurc]

I agree with this JB. Just when???

Well for sure we will get signs from the bond market ...when we see a major spike higher it's going hurt emerging markets and hurt growth in debt which as we know is the fuel driving the likes of the S&P to record highs ... so many companies loan to buy back shares to add give EPS growth and hit mgmt bousnes >> property markets at record high.. consumer debt - cusumer spending all connected ....house of cards that heading for a HUGE correction

[kiora]

"The yield curve has flattened, with the spread between 10-year and 3-month Treasuries falling to 1.0% on the above graph. That is what one would expect when the Fed hikes interest rates in a low inflation environment: short-term rates will rise faster than long-term rates. But a negative yield curve, where short-term rates are higher than long-term rates, is a reliable predictor of recessions in the US economy. Each time the yield differential on the above graph crossed below zero in the last 50 years, a recession has followed within 12 months.The bull market continues but investors need to keep a weather eye on interest rates and the yield curve."
http://tradingdiary.incrediblecharts.com/trading_diary.php