Login/Sign up

World Association of International Studies

Post Gold ETFs, Again
Created by John Eipper on 06/21/17 8:31 AM

Previous posts in this discussion:


Gold ETFs, Again (Tor Guimaraes, USA, 06/21/17 8:31 am)

Ric Mauricio stated on June 16th, "I believe [Tor's] Las Vegas comparison would be more apt if NUGT or DUST were traded short term, which is what they were designed for anyway, but I found many investors don't understand this."

I believe Ric may have missed my point.

If one looks at NUGT's 5-year chart for example, the share price went steadily down (relatively little fluctuation) from $7,584 (high) to a low of around $20. The 1-year chart high was around $136. And everyone seems to agree that going up long term is not likely, even though NUGT and DUST are promised to be inverse ETF's in the short run. The charts for DUST look not as bad, but bad enough for meaningful long-term bear trading.

If we know all that then let's do some possible DUST plays right now for examples:

The DUST share price now is around $31. Sell the DUST January 2018 at $70. Calls for $2.40 per share and sit on them for the next 7 months. Likelihood that the price will get to $70 by next January is practically zero. If you like more adrenaline, short the $45 calls for more money and risk.

We can make things much safer by combining this play with a January 2018 call spread (I. e. buy the $20 calls and sell the $35 calls).

We can do similar plays using NUGT shares, now that it has recently reverse split.

That is what I had in mind when I said, ""Wall Street is just like Las Vegas but with crooked games. ... Most important, if you can figure out how the game is crooked, you can make money with the house." It is somewhat sneaky for the average guy for Direxion to sell NUGT and DUST as inverse ETFs, since they both go only down in the long term.

JE comments:  Are you (also) confused about inverse ETFs?  Click below for an explanation from Investopedia.  To my mind, they look like formulas for losing lots of money--especially if an economy booms.

Aren't the transactions outlined above zero-sum games, meaning, you have to find a transaction partner willing to bet the other way?


Rate this post
Informational value 
Reader Ratings (1)
Informational value100%

Visits: 83


Please login/register to reply or comment: Login/Sign up

Trending Now

All Forums with Published Content (44453 posts)

- Unassigned

Culture & Language

American Indians Art Awards Bestiary of Insults Books Conspiracy Theories Culture Ethics Film Food Futurology Gender Issues Humor Intellectuals Jews Language Literature Media Coverage Movies Music Newspapers Numismatics Philosophy Plagiarism Prisons Racial Issues Sports Tattoos Western Civilization World Communications


Capitalism Economics International Finance World Bank World Economy


Education Hoover Institution Journal Publications Libraries Universities World Bibliography Series


Biographies Conspiracies Crime Decline of West German Holocaust Historical Figures History Holocausts Individuals Japanese Holocaust Leaders Learning Biographies Learning History Russian Holocaust Turkish Holocaust


Afghanistan Africa Albania Algeria Argentina Asia Australia Austria Bangladesh Belgium Belize Bolivia Brazil Canada Central America Chechnya Chile China Colombia Costa Rica Croatia Cuba Cyprus Czech Republic Denmark East Europe East Timor Ecuador Egypt El Salvador England Estonia Ethiopia Europe European Union Finland France French Guiana Germany Greece Guatemala Haiti Hungary Iceland India Indonesia Iran (Persia) Iraq Ireland Israel/Palestine Italy Japan Jordan Kenya Korea Kosovo Kuwait Kyrgyzstan Latin America Liberia Libya Mali Mexico Middle East Mongolia Morocco Namibia Nations Compared Netherlands New Zealand Nicaragua Niger Nigeria North America Norway Pacific Islands Pakistan Palestine Paraguay Peru Philippines Poland Polombia Portugal Romania Saudi Arabia Scandinavia Scotland Serbia Singapore Slovakia South Africa South America Southeast Asia Spain Sudan Sweden Switzerland Syria Thailand The Pacific Tunisia Turkey Turkmenistan UK (United Kingdom) Ukraine USA (America) USSR/Russia Uzbekistan Venezuela Vietnam West Europe Yemen Yugoslavia Zaire


Balkanization Communism Constitutions Democracy Dictators Diplomacy Floism Global Issues Hegemony Homeland Security Human Rights Immigration International Events Law Nationalism NATO Organizations Peace Politics Terrorism United Nations US Elections 2008 US Elections 2012 US Elections 2016 US Elections 2020 Violence War War Crimes Within the US


Christianity Hinduism Islam Judaism Liberation Theology Religion

Science & Technology

Alcohol Anthropology Automotives Biological Weapons Design and Architecture Drugs Energy Environment Internet Landmines Mathematics Medicine Natural Disasters Psychology Recycling Research Science and Humanities Sexuality Space Technology World Wide Web (Internet)


Geography Maps Tourism Transportation


1-TRIBUTES TO PROFESSOR HILTON 2001 Conference on Globalizations Academic WAR Forums Ask WAIS Experts Benefactors Chairman General News Member Information Member Nomination PAIS Research News Ronald Hilton Quotes Seasonal Messages Tributes to Prof. Hilton Varia Various Topics WAIS WAIS 2006 Conference WAIS Board Members WAIS History WAIS Interviews WAIS NEWS waisworld.org launch WAR Forums on Media & Research Who's Who