The following are my comments on the proposed restrictions on leveraged and inverse ETF funds.
I have been using long/inverse ETF pairs since 2006 to improve my investment/trading portfolio profits.
During the 2008/2009 market crash, I was making record returns using major sector inverse ETFs while my fellow retired Verizon associates were getting crushed by the market. Many of them lost 50 to 60% of their portfolios. My most profitable inverse ETF was DXD during that period, but also used TWM SDS & QID to protect myself.
I continue to use various pairs including GLD/GLL DDM/DXD, SVXY/(UVXY/VXX), FXI/FXP, SSO/SDS, SMH/SSG, etc. to work the ups and downs of the market. I use the inverses to hedge my long investments, and often work trading ranges within the long-term investment strategy.
I also used them during the YE pullback in 2018, that caught many of my associates by surprise. Had they been paying attention to the right people on Bloomberg, such as Mohamed El-Erian, Scott Minerd, Diane Swonk, and Louise Yamada they should not have been surprised at all.
I was also able to make money during the COVID crash, while most of my neighbors stood around like deer in the headlights. Why on earth would you want to deprive the average retail investor of this powerful insurance tool? Especially in the hyper-volatile market that we are faced with today.
These pair straddles allow me to build positions as various sectors go through topping and bottoming transitions.
Below is a brief example of how I do this.
I Started building my position in TBT in the middle of September 2020. After booking my YE adjusted dividends I began to step out of my various bond ETFs (short-end, intermediate, long-end). I have just started to add back to some of those positions. This allowed me to maximize my profits by using both ends of the trade/investment. I will start stepping out of TBT (I have already booked some profits) using trailing stops.
Here is where I stand with several of the inverse/short ETFs at COB Friday 05/06/2022:
TBT -- PLUS 76%
FXP -- PLUS 15%
QID -- PLUS 32%
SDS -- PLUS 19%
SSG -- PLUS 36%
UVXY -- PLUS 56%.
I ask you please do not put any onerous restrictions/requirements on us small retail investors. The scales are already heavily stacked against us.
Michael Bitto Comment On Regulatory Notice 22-08
To whom it may concern:
The following are my comments on the proposed restrictions on leveraged and inverse ETF funds.
I have been using long/inverse ETF pairs since 2006 to improve my investment/trading portfolio profits.
During the 2008/2009 market crash, I was making record returns using major sector inverse ETFs while my fellow retired Verizon associates were getting crushed by the market. Many of them lost 50 to 60% of their portfolios. My most profitable inverse ETF was DXD during that period, but also used TWM SDS & QID to protect myself.
I continue to use various pairs including GLD/GLL DDM/DXD, SVXY/(UVXY/VXX), FXI/FXP, SSO/SDS, SMH/SSG, etc. to work the ups and downs of the market. I use the inverses to hedge my long investments, and often work trading ranges within the long-term investment strategy.
I also used them during the YE pullback in 2018, that caught many of my associates by surprise. Had they been paying attention to the right people on Bloomberg, such as Mohamed El-Erian, Scott Minerd, Diane Swonk, and Louise Yamada they should not have been surprised at all.
I was also able to make money during the COVID crash, while most of my neighbors stood around like deer in the headlights. Why on earth would you want to deprive the average retail investor of this powerful insurance tool? Especially in the hyper-volatile market that we are faced with today.
These pair straddles allow me to build positions as various sectors go through topping and bottoming transitions.
Below is a brief example of how I do this.
I Started building my position in TBT in the middle of September 2020. After booking my YE adjusted dividends I began to step out of my various bond ETFs (short-end, intermediate, long-end). I have just started to add back to some of those positions. This allowed me to maximize my profits by using both ends of the trade/investment. I will start stepping out of TBT (I have already booked some profits) using trailing stops.
Here is where I stand with several of the inverse/short ETFs at COB Friday 05/06/2022:
TBT -- PLUS 76%
FXP -- PLUS 15%
QID -- PLUS 32%
SDS -- PLUS 19%
SSG -- PLUS 36%
UVXY -- PLUS 56%.
I ask you please do not put any onerous restrictions/requirements on us small retail investors. The scales are already heavily stacked against us.
Thank you in advance.
M. J. Bitto Jr.