After that day, the ETF is worth $60. If you sell $5 of it, you hold $55 of 2x exposure and $5 of cash, which is equivalent to what you would have if you had done no trading; on net you are long $110 of stocks and short $50 cash.
Thanks for this! Now I understand.
BTW, if you have time:
What’s your opinion on non-rebalancing leverage done manually?
What if you pay for the leverage interest using new income in a similar way as people pay off home loans? (This doc encourages such an approach.)
Thanks for this! Now I understand.
BTW, if you have time:
What’s your opinion on non-rebalancing leverage done manually?
What if you pay for the leverage interest using new income in a similar way as people pay off home loans? (This doc encourages such an approach.)