05-25-2021, 02:00 AM
2x XLE etf broke but not 3x QQQ after March 2020?
<!-- SC_OFF --><div class="md"><p>I have some understanding of leveraged etf. The risk of 2x leveraged etf is 50% drawdown will need 100%. Now I look at XLE and it has a 58% drop in March 2020. </p> <p>The 2x etf ERX dropped and never recovered to pre-March level. Then I look at SPY and it has a 32% drop in March 2020. The 3x etf SPXL dropped and recovered around same time as SPY. </p> <p>What happened that caused ERX to break? Thanks. There are other leveraged ETFS that broke too such as gold leverage etfs.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/bbbrrffff"> /u/bbbrrffff </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/nk3bde/2x_xle_etf_broke_but_not_3x_qqq_after_march_2020/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/nk3bde/2x_xle_etf_broke_but_not_3x_qqq_after_march_2020/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>I have some understanding of leveraged etf. The risk of 2x leveraged etf is 50% drawdown will need 100%. Now I look at XLE and it has a 58% drop in March 2020. </p> <p>The 2x etf ERX dropped and never recovered to pre-March level. Then I look at SPY and it has a 32% drop in March 2020. The 3x etf SPXL dropped and recovered around same time as SPY. </p> <p>What happened that caused ERX to break? Thanks. There are other leveraged ETFS that broke too such as gold leverage etfs.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/bbbrrffff"> /u/bbbrrffff </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/nk3bde/2x_xle_etf_broke_but_not_3x_qqq_after_march_2020/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/nk3bde/2x_xle_etf_broke_but_not_3x_qqq_after_march_2020/">[comments]</a></span>Kind Regards R