 Welcome back with us folks tonight. What we want to focus on is Try to steer away from the dangers of leverage DTS the reasons for this pretty simple What we want to promote is risk management making sure that the odds go your way I mean when you gamble you know the house will always win no matter what you do It's not like flipping a coin 50 50. It's even the worst It goes always the house always wins So we've tried to stay away from all this guesswork and try to make sure that everything goes We have the more the best chances on yours on our side rather than trying to you know Have worse than flipping coins results. So basically I'll show you why I feel that the dangers of Leveraged ETS and if you Google them, you'll see that you know many other traders are pretty much in the same opinion that I am and and Just to start with I'll give you a few examples and you know, you can make your own decision after that I'm not saying this shouldn't be there. I'm just trying to show you that the idea is let's let's make sure that we have the more chances on our side now Not saying they're not going to win ever but let's start with what's an ETF? ETF is a basket in which we put stocks that can be traded Sometimes we will have indexes such as the S&P 500 the NASDAQ 100 the VIX is another one VIX is the I call it fear factor volatility index all of these guys cannot Be there their indexes. So basically they're an indicator of what's happening If you wanted to trade them while they have ETX exchange traded funds that like I said and now using derivatives future contracts options all that in order to make it happen for you to be able to trade these these stocks these funds now The idea is to show you what's neat. It's not to show you what an ETF is. It is to show you what a leverage ETF is Leverage is basically they take the ETF and they can multiply it by 1.5 Two times or even three times. So basically if It's up three percent on the same day the three times ETF will be up nine percent Which on paper sounds amazing, right? You'd you'd be like, yeah, I'm in for that. I want to trade that however, I'll show you in a long run how it can be very risky And I'm not talking about the fact that these ETFs and leveraged ETFs have a very high Maintenance fee if you want to call it. Let's say the ETF is about 0.05% where the leverage can be as high as 1% so basically it's always Costing more and always going down In the end so if you want to trade something to the upside well, this one is already starting with the fees to the downside so Quick example here if you were to buy an ETF at ten dollars Your first day you're up 25% At the end of day you're at 1250 you guys agree with that next day while it's down 20% You're down to ten dollars Right you guys will see this right this is the ETF If you were to have a three times ETF basically If you buy at ten dollars scroll this up a little bit if you buy at ten dollars Well, you're super happy because you know you had 25% for now You're up 75 because it's three times the 70 the 25% So on the first day you're 1750 The had stop if you stop there, it's great and we can all see the use of that. However on the next day What's the drop drop is three three times the? Three times 20 three times 20 is 60% so it's down 60% Down 60% is what down 60% is $7. Yeah, you're only left with 40% of the original value that you had the day before Right, so this becomes really tricky and I'll show you a few more examples because you say okay You're now you're showing just the one that pleases you and it makes your example work let's say Market is designed to go up right you take a ten dollar same thing So it's one day up 20 down 15 up 20 down 15 You've seen that before I mean I'm exaggerating a little bit, but let's follow this Up 20 is what? 12 Down 15 is what? 10 20 up 20 is what? 12 24 Down 15 is what 10 40 so market is designed to go up You know on this volatility high volatility day, you know up 20 down 15 is called volatility in my book, so you were you started at 10 four days after you're left with 10 40 What's the? Three times ETF basically what we're looking at is this First day you're up 60 right down 45 Next day up 60 down 45 see how it goes, right? So you're up 60 is done is up to what 16 now if they were to stop there You'd be more than happy right but down 45 is down to what 880 Up 60 is what 14 oh four eight and Then you're down 45 you down to 775 so You see that in the end and this started at 10 bucks only held through this volatility That the stock is still rising and your ETF Is much lower by a significant margin So what i'm trying to show you folks is this Be very careful of what's happening with these things because they are bound to go to zero You know if we had Back into days and We had a big huge drop on on the Dow, which is usually a very safe haven If it were to drop 33 percent You're Leveraged three times is now we're zero You guys should all see that so Not saying that it's going to happen. I'm just showing that possibilities are there And you know, let me show you another example. It's pretty simple You know up 10 down 10 up 10 down 10, which is you know flat trading You know up 10 if you start with that same $10 up 10 is what 11 down 10 is what 9.9 Up 10 is what 10 89 And then down 10 is what 980 so You know, you're very close to Trading flat You're down, you know a few pennies if you go with the treat the leverage ETF three times Call it whatever two times 1.5. You know the uv x y is 1.5. It's doing the same thing You know, it's up 30 down 30 up 30 down 30 you get up your year with what 13 9.1 then up 1183 down 828 You know, this was down a little bit now. This is down huge So i'm just sharing with you folks the dangers of this in a high volatility market Is even worse If you want to catch something You have you need a plan that will work and put everything on your side And what i'm trying to show you here is just be aware of how tricky these things can be and how You know holding on for a swing that is long I mean, you're you're put you're not putting the odds on on your side basically Like I told you, you know gambling house wins in this case everything Points toward towards the house That is going to win. So, you know, I hope you guys understand a little bit the dangers of how this can be And how you can now trade it by saying it's not possible. You know a one day Scout or or trade can be a good thing But be aware that there are significant dangers trading leverage ETFs. Hope this helps folks Stay busy