Can anybody explain why I wouldn't want to put a ton of money into AGQ at these prices? Obviously if silver falls to $25 I am going to take a major hit, but I am more interested in knowing if there is the possibility that silver explodes and for whatever reason AGQ self-destructs. I am sick of holding dogs like Hecla. If we truly believe that silver is headed to the moon than wouldn't this be the best vehicle to profit from that explosion?
AGQ: what are the risks?
Honestly, AGQ at this price is a great investment. The downside with leverage though is decay. That's what people mean when these things and 3x like FAZ, TNA, TZA, FAS, SRS, etc are horrible investments.
It's a wrong statement. The real statement is, these are horrible investments to hold in choppy markets. They are VERY effective in trending markets and or volatile break outs (if you're on the right side).
The problem is "decay". Picture it like this, AGQ is $10. Silver goes up 10%, so AGQ is now $11. Now silver loses 10%. AGQ is $9.90. Oops. So now for AGQ to get back to $11, it needs to gain 11.11% to get back to $11.00.
It's a trivial amount in the short term, but long term this decay can really erode your value and marginalizes the return. But my advice would be to put a few grand you can afford to lock up // lose (pure investment) and grab your balls and go. This is a great time for AGQ.