More nitty gritty behind the 3x leveraged ETF's. Want to know about those late day moves and how they might happen? Via Naked Capitalism's link to a site called Abnormal returns I found this post on The Daily Options Report that led me back to the WSJ where Saturday there was a post on Will Leveraged ETFs Put Cracks in Market Close?
"Now let's say the fund's net assets grow by $10 million during the day, to $110 million. The fund must raise its swap exposure from $200 million to $220 million to honor its 2-for-1 investment objective. That is $20 million in extra buy orders, all coming into the market after 3:30 p.m., typically in the final 10 minutes."
It is a short but interesting read. Click on the title of this post to go to the article.