Recently, I sold off the leveraged ETF for one of the semi stocks this week. I bought on last Friday but it dipped suddenly on Feb 2, Sunday overnight trading when Trump announced tarriffs. The price went 10% below my purchase price but given that the stock has strong momentum, it bounced even higher after a few days and I gained 10% when I sold off. Why I don't post exact stock symbols/name is because of the recent MAS regulation. My posts are purely for educational purposes only, and I do not provide any financial advice nor sell any financial products.
Buying and selling leveraged ETFs is risky, and one has to be very careful with the stock pick. Always set a cut loss and monitor carefully. As I shared in my previous posts, I have been allocating more capital to short-term trading and now I hardly have < 10% long-term holdings, because there is a greater uncertainty this year due to trade wars, slowing down of rate cuts, a possible rate increase and doubts on AI capex spending. The fear/greed index is still showing fear, the longest streak it has been since 2024.
One of my smaller accounts had a 80% gain from June 2024 to Feb 2025. I had losses and profits. One of the biggest losses is 20% for a commodity leveraged ETF which I forgot to set a cut loss. But fortunately, I was able to recoup the losses via a few trades. I am looking to scale this profitable strategy up to my main account which is not so easy given the much larger capital. It is mentally and technically quite difficult to 'deploy' large sums quickly for a trade.
I'm sure there are many times when you cut loss or sold, only to see the stock rise up even further. I had many such encounters in the past. Example, as explained in this past post I sold off 2 SaaS tech stocks during the period of uncertainty and now they have went up by 10-20% since then. Do I regret? Yes and no. Looking back, I felt uncomfortable and wanted to increase my cash level. But of course, who doesn't want to make more $?
One way to reduce risks for short-term trading, is do not hold your positions over key events / weekends. Easier said than done, so always be prepared to cut loss or average down. Key events such as company earnings, economic news, etc.
Many of you have messaged me privately what is a leveraged ETF? I will explain more in my next post.
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