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MuddlineThru:
Late night ... so I'll keep this short. You can do this yourself. If the underlying is 100 one day one, goes down 90 day 2, and comes up to 100 day 3, SKF will be 100 day 1, 120 day 2 and 93.33 day 3. So, even though the underlying did not change, SKF has already lost. Compound this over time, and you'll see as time stretches to infinity, the ultra funds tend to zero. This is why going short UYG makes sense over going long SKF. Check this graph. http://finance.yahoo.com/echarts?s=UYG#chart2:symbol=uyg;range=2y;compare=skf;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Even though UYG and SKF started around the same pricing range, UYG has declined more than SKF has risen percentage wise.

Muzzy:
You have to weigh the dividend payout vs reward on the short side. I think as UYG tends