How does a ProShares:UlS S&P 500 (SDS) make money?
GerryB
04-11-2008, 2:36 PM | Post #2507413 |
2 Replies
I would appreciate any clarification. I'm a newbie.
The Fund seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the S&P 500 Index.
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Dividend yield is based on regular and irregular dividends and may not reflect an established regular annual rate. Initial monthly and quarterly dividends are annualized and presented as an annual yield.
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From the Wall Street Journal: | Investment Information | | Market Cap | $2,468,808,000 | | Net Assets | $2,922,500,000 | | NAV | $60.37 | | Prem/Discount | 0.23% | | Shares Outstanding | 40,800,000 | | Avg Daily Vol | 26,569,100 | | Dividend Yield % | 1.58 | | Latest Dividend | $0.24 - 03/25/2008 |
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Jerry
Re: How does a ProShares:UlS S&P 500 (SDS) make money?
04-11-2008, 11:19 PM | Post #2507535
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When the SP500 goes down SDS goes up twice as much. ie. SP500 goes down 1% ,
SDS will go up 2%.
If one is doublely sure the market is going down , SDS is what you want to buy to make twice the money. But if you're wrong you'll lose twice as much.
Re: How does a ProShares:UlS S&P 500 (SDS) make money?
04-12-2008, 8:34 AM | Post #2507580
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To answer your subject line question, they do it by investing in a portfolio of highly rated securities and then using the portfolio as collateral for trading derivatives and swaps which gave the desired negative leverage. The best way to understand the nature of these securities is by reading the prospectus.
Unfortunately, Proshares bundles their prospectii for all the funds; thus you have to wade through a lot of irrelevance to find the proper document. The prospectus can be downloaded in .pdf form from the sponsor website