EPS - The Easy VIX: Enhanced Leveraged Gains And Hard Cap On Losses

Risk and Leverage

Since I’ll be discussing leveraged applications, I’m going to begin with some sobering data regarding risk. The thrust of this article is how to mitigate that risk to manageable levels, while pursuing outsized returns. But first, let’s look at the risk. Here is a table of the 30 largest daily moves in the S&P since 1928, both gains and losses. I’ve also shown the daily losses times 3, since we’ll be discussing a 3X leveraged ETF.

S&P Daily Extremes Since 1928 - 30 biggest Daily Moves, Up and Down

(Source: Michael Gettings

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