TECL

In this article I will walk you through the commonly used but wrong way to think about volatility decay.We'll then walk through an example of volatility decay with realistic numbers.Afterwards, we'll build a simple mathematical model to calculate volatility decay from first principles.We'll compare the model with back-test simulations done on portfoliovisualizer.com.

The darling technology sector took some lumps earlier this month, but consensus wisdom appears to be that was a mere blip and the group will get its groove back if it's not already doing so.What HappenedOf course, that would be beneficial to the Direxion Daily Technology Bull 3X Shares (NYSE: TECL

It would be reasonable to expect that last week's breathtaking declines among marquee technology stocks and the Nasdaq-100 Index would be all the impetus traders need to abandon leveraged tech exchange-traded funds, at least for the moment.

Investors have been on a wild ride over the past week as tech stocks plunged, dragging down major global indexes with them.Some are suggesting this is the start of another dramatic sell-off, similar to the spring of 2000, when the “tech bubble” burst. I highly doubt that.I think of this rout not so much as a correction, but as a digestion given that the NASDAQ Composite rose more than 60% from its March bottom in the course of less than six months.

Market swings are like pendulums. They always go too far.But just like a pendulum, it inevitably swings back, and this time is no different.Investors using fundamental arguments to judge this market have been off for 5 years now, but the sentiment indicators, the best judge of market turning points, are flashing red.And just like the Buffett quote, what the wise man does in the beginning, the fool does in the end. The argument for tech stocks to keep surging driven by low-interest rates are no longer strong because valuations have already reflected low rates.Given the rising anecdotal evidence of sheer greed and participation from retail, we don't think this time is different and this tech bubble won't last.

Newly minted bond bears got a harsh lesson in market timing on Tuesday as a precipitous drop in technology shares sent investors in search of havens.

As the brutal technology rout deepens, exchange-traded fund investors are placing bets on value.