Synthetic UPRO and SSO

In an effort to better model how higher rates may affect leveraged ETFs and their ability to obtain low cost leverage I have been doing some backtesting for periods before and after the inception of SSO and UPRO. I have done this before, but am using a different method. Rather than assuming a roughly fixed cost for leveraged ETFs to obtain financing I am using the Federal Funds Rate plus a buffer. I imagine this would be a better simulation for environments with different borrowing costs. The method of calculation holds up very well over the periods that UPRO and SSO actually existed.

Synthetic UPRO (3X S&P 500 ETF)

Synthetic SSO (2X S&P 500 ETF)

See my Brokerage Accounts

In addition to this blog you can follow my live brokerage accounts anytime. The three links below will take you to a third-party website called collective2 where I record and publish my personal trading decisions. If you have questions let me know!

Retirement Account #1:Patience is a Virtue

Retirement Account #2: My Roth IRA

Paper Trading Account #3: Leverage and Patience

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

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