tag:blogger.com,1999:blog-2903618192803822774.post1145336179520535112..comments2023-11-05T06:59:47.549-05:00Comments on StockMarketAlchemy: Lessons From Today's Trades......Pete Birchlerhttp://www.blogger.com/profile/03979249321821901449noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2903618192803822774.post-19093224792105745232009-04-23T11:34:00.000-04:002009-04-23T11:34:00.000-04:00Other than going through the Q&A's, etc. o...Other than going through the Q&A's, etc. on proshares.com, I couldn't answer any of that for you. <br /><br />The only thing I would think is that these ultra funds typically use futures contracts and equity swaps to achieve the stated performance goal. <br /><br />Futures contracts would have to be rolled over to the next month at every expiration. The futures contracts at different expirations have different "carrying charges." So I don't know if there are differences in which contracts, etc. are held short versus long in the inverse or standard ETF's or if that would make a difference.<br /><br />Also, the funds like this use equity swaps (which honestly I don't know much about). But I think the idea is that a fund like this is not going to actually buy and sell all these contracts, etc to represent the change in market value of the fund. I think that would create huge tax consequences. My understanding is that the equity swaps are not taxable but are some type of agreement of a fund to pay a backer/bank the performance of the index at certain intervals while the backer is responsbile for continuously "lending" the money to reflect the fund market value.<br /><br />So I think it ends up being an even swap but I think that the bank gets some type of money market rate on the cash/loan so that they have some profit in the transaction. So the fund does have an expense in that area that they would probably pass on to the investor in some way.<br /><br />So I don't know if that helps at all, but really I don't think I can answer your other questions any better than you could with a little effort.Pete Birchlerhttps://www.blogger.com/profile/03979249321821901449noreply@blogger.comtag:blogger.com,1999:blog-2903618192803822774.post-14676681770119957262009-04-23T07:27:00.000-04:002009-04-23T07:27:00.000-04:00I have a prospectus for the ProShares funds and ha...I have a prospectus for the ProShares funds and have a few questions. There is not a real good correlation between the the Ultra- funds vs the Short- funds with regard to return. In other words, if the objectives are met equally in these funds, the inverse funds would have a return equal to the inverse of the corresponding Ultra- funds. Some of them are close, but there is still a spread. This raises some questions for me. Are there traders who are closer to the funds who have an advantage over you and me? Is there a way to follow the net asset value intra-day as compared to the market value, either real time, or after the fact?jsknoreply@blogger.com