SOXL vs SOXX for the conservative variant?
For those running the conservative version of the system; are you using SOXX (1x) instead of SOXL (3x), or are you keeping SOXL and just reducing position size?
Trying to decide which lever is the better way to dial down risk: the unleveraged instrument, or smaller size on the leveraged one. Curious how people think about the tradeoff.
Replies(3)
I prefer smaller size on SOXL over switching to SOXX. Leverage decay on the 3x is real but at our holding periods I'd rather control risk with sizing than change the instrument's behavior.
Counterpoint: SOXX removes the daily-rebalance decay entirely, which matters more in choppy sideways markets. I split; core in SOXX, a smaller satellite in SOXL.
Both great perspectives. The split approach is interesting, hadn't considered running them side by side.
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