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On Tue, 8 Sep 1998, Bob Fulks wrote:
> In addition, the Rydex funds have not been matching their beta objectives
> recently on a day to day basis, no doubt because lots of people have
> figured out when to switch and all switch on the same days.
I swear, Ursa looked like it was declining on days when the broad market
was also declining. What's with *that*?
> I have been using my system to trade index options but this adds all of the
> implied volatility issues to the equation.
Index options are notoriously expensive compared to futures and are
dispersed (although looking at some prices back when the VIX
was around 20 there were some sweet deals). I suppose you could make a
good living writing premium too but you need deep pockets.
> As a result I have been looking into using this system to trade Spyders
> (S&P Depository Receipts; symbol = SPY on the AMEX) It seems to track the
> S&P pretty well and does not require a decision at some fixed time.
The problem with the SPY is the lack of leverage. Your risk is reduced
but the profits are so ho-hum you ask yourself why you bothered with it in
the first place (unless you shorted them at the peak in July and covered
this past Friday) which is why I didn't.
So what is my point? There's no free lunch and there's always a catch
either in risk, cost or profit. If there were a grail, someone would
have found it by now and we'd all be trading from our yachts in the
Bahamas (or should that be bass boat?) :-)
- Hacker
---
Dark Hacker | Fortress Of Computation
mail: hacker@xxxxxxxxxxxxxxx | web: http://www.computation.com/pub/hacker/
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