FAS FAZ losses pile up: $3.4B. Next "eclipse" $30.62

FAS and FAZ are the infamous financial 3X leveraged ETFs that have cause so much grief and losses to their investors. As of today, the losses are just over $3.4B (out of an initial market cap of $6B).



FAS and FAZ had splits in July 2009. At that time, several 'eclipses" had ocurred (when the nominal prices were identical). After the split, FAS went to $40, and FAZ to $60. They soon had an eclipse, when FAS went higher and FAZ dropped, please see initial crossing on chart below.

As these instruments lose value over time, it is only a matter of time for another eclipse to occur. The next eclipse , computed at 11AM today, will be at $30.63.

FAS * (1+x) = FAZ (1-x)
x= 0.568

Therefore, as of right now, the next eclipse will occur when FAZ rises 56.8%, and FAZ drops 56.8%, bringing both to a price of $30.62. (FAS is currently at $70.98, and FAZ is at $19.53)

These values of course change every minute, as FAS and FAZ contnue to go up and down, losing more money. You can bet that the next eclipse in fact will be much lower than $30.62.