Leveraged ETF news has been relatively slow in the past few months. There are only so many articles people can write about decay, compounding, and risks, and these topics have been covered thoroughly in the past year. I will continue to post links to news articles as I see them, but since there are so few articles it will probably be once a month or every few months. Aside from the news there are still many research articles I intend to write about leveraged ETFs. I have a long list of topics and ideas that I will eventually cover, and hopefully they prove beneficial to traders’ and investors’ understanding of how they perform in a variety of scenarios.
Overnight holders (Nov. 19 to Nov. 20) of some Direxion leveraged ETFs (ERX, EDC, TNA, etc.) may have been confused to see the price drop around 10%. The reason is due to the funds paying distributions. For example, excluding normal market action, ERX dropped $4.65 due to a $4.65/share dividend. Someone holding 100 shares will receive $465 which will be taxed as a short term capital gain. The date of payment is November 30, 2009.
More information can be found on the Direxion website: http://www.direxionshares.com/pdfs/DS_Div_1109.pdf