UPRO ETF

UPRO offers 3x daily returns of S&P 500, but volatility decay can impact long-term performance. Strategic use of UPRO in 50-50 split with cash can outperform S&P 500 in calm markets and limit downside risk. UPRO can be used to buy the current market dip strategically, maximizing returns while preserving optionality and managing risk.

Leveraged ETFs like UPRO can be powerful tools for investors if used correctly. Hedging with inverse ETFs can help mitigate risks and maximize gains. Technical analysis and a well-thought-out trading plan are essential for successful execution of leveraged ETF strategies.

UPRO is a triple-leveraged ETF that aims to deliver three times the daily return of the S&P 500, but it comes with high volatility and drawdown risks. Despite the risks, owning UPRO can be a strategic way to ride the stock market rally while protecting against significant losses. By allocating a portion of a portfolio to UPRO and cash, investors can effectively "delever" and emulate the performance of the S&P 500 while minimizing downside exposure.

Thirteen months ago, we recommended buying ProShares 3X fund UPRO based on signals of the end of the bear market. However, the strong buy signals of last year are fading as we enter 2024, suggesting reducing leverage by selling UPRO and buying SPY. The caution of reducing leverage is advised as both sentiment swings towards "too many bulls" and buying activity in UPRO declines.

The ProShares UltraPro S&P500 ETF aims to deliver 3x the one-day returns on the S&P 500 Index. Levered ETFs like UPRO have positive convexity and volatility decay, causing them to deviate significantly from their underlying indices over time. Nimble traders can take advantage of positive convexity and use levered ETFs as swing trading instruments.

ProShares UltraPro S&P500 ETF has experienced a bearish trend, losing 17.92% in the last month. The market correction in September 2023 and a bleak market outlook have contributed to UPRO's downward pressure. The leveraged ETF market faces headwinds such as high inflation, rising interest rates, and the reduction of the Federal Reserve's stimulus.