UCO ETF question, cost/gain/loss

Hi,
I'm totally new to trading concepts and need to learn basics, sorry if the question is premature.
I'm looking at an ETF UCO with LX2
There are some points that I do not understand and after reading some threads and sites I got even more confused

http://www.proshares.com/funds/uco.html

"This Ultra ProShares ETF seeks a return that is 2x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks. Investors should monitor their holdings consistent with their strategies, as frequently as daily. "

at the website it says "Expense Ratio*" is 0.95%, what does it realy mean?
I read that these ETFs are good for single day trading what does it really mean what happen if I keep this long term for let say 6 month for example.

This the scenario: Let say I bought 1000 unit of UCO on 12/1/2014 when it was 10$ each equal to 10,000$ total (Traditional cash buying so no Margin involved),
today (2/12/2015) price was 8.80$ each let say I sell it today, then how mush is my total loss? (brokerage commission is 7$)
now let say instead of sell it I keep it for 6 moths and sell it on 5/1/2015 when price is 11$ each equal 11,000$ then what would be the case?

another question the brokerage said that UCO is Subject to Higher Maintenance 22%, what does it really mean? what will be the cost for this trade based on above scenario
Thanks,
Fred

I'm not sure I know how to answer all of your questions, but this might help.
ETF's in general require extra fee's to pay the people who create and manage them, in the example above this would be the Proshares people. Leveraged ETF's require higher fee's because the amount of time and energy people need to put into them is higher. This extra time is because they involve derivatives that need to be swapped out or managed daily. This is one of the reasons they are typically for day trading. The other reason is because if you can go up 2x faster, you can also go down 2x faster.

In your example, a lot can happen in 6 months and if 10% is your goal there are less volotile ways to go about trying to get it. Expense ratio is what it cost the fund to manage the ETF. Its like a business expense of the fund. There are unique expenses with ETF's that you obviously already know about, but I couldnt tell you specifically what they are. If you want to know how much you'll make you gotta know what those are and factor them in. Also, each fund is different.

$10,000 bought.
Falls to $8800
$10000 - $8800= $1200 loss
$1200 + $14 commission = $1214
$10000 - $1214 = $8786 Left in your Account, less whatever fees unique to the ETF you traded.

For the other one its a thousand dollar gain minus fourteen bucks and the ETF fee's, whatever they may be.

Ye the fees are figured into the price of the underlying, It's not something you need to worry much about unless you are playing a long term position. If you are new to trading you might stay out of the deep end of the pool with volatility products or practice with paper trading. Volatility products....are volatile.

I like volatility so I look for regular underlyings with high implied volatility rank. Oil is already high in volatility so a good short term index is USO...it trades against the futures so there is some drag that adds up over longer periods of time...but works fine for shorter time frames.

HungryWallet said: ↑
I'm not sure I know how to answer all of your questions, but this might help.
ETF's in general require extra fee's to pay the people who create and manage them, in the example above this would be the Proshares people. Leveraged ETF's require higher fee's because the amount of time and energy people need to put into them is higher. This extra time is because they involve derivatives that need to be swapped out or managed daily. This is one of the reasons they are typically for day trading. The other reason is because if you can go up 2x faster, you can also go down 2x faster.

In your example, a lot can happen in 6 months and if 10% is your goal there are less volotile ways to go about trying to get it. Expense ratio is what it cost the fund to manage the ETF. Its like a business expense of the fund. There are unique expenses with ETF's that you obviously already know about, but I couldnt tell you specifically what they are. If you want to know how much you'll make you gotta know what those are and factor them in. Also, each fund is different.

$10,000 bought.
Falls to $8800
$10000 - $8800= $1200 loss
$1200 + $14 commission = $1214
$10000 - $1214 = $8786 Left in your Account, less whatever fees unique to the ETF you traded.

For the other one its a thousand dollar gain minus fourteen bucks and the ETF fee's, whatever they may be.
Click to expand...
HungryWallet, the calculation that you post is not what I was looking for. what I wanted to know is the missing part of the equation that you have there, the "fees unique to the ETF you traded"!
let me be more clear, I need to know how to calculate those cost and what information I exactly need to calculate them, as I mentioned the brokerage says UCO is Subject to Higher Maintenance 22%, what does it mean 22% of what? does number of days that you keep this ETF has effect on fees or it does not matter if I sell it today or 6 month later? if it does matter then what numbers should I have and what formula I have to use for that?

let me make my question even more simpler! assume that I had closed my eyes and bought 10 unit of an ETF "Foo" with 2X leverage for 1$ each and I have no idea what it is I only know that price of the ticket "Foo" at the buying time was 1$, then I keep it for 6 month and the ticket "Foo" price now (after 6 month) is 2$ (let's say brokerage commission is 1$ for each trade)
so I paid 10+1$ to buy then I would have 20-1$ after sell, so gain would be 8$ if there were no fees but obviously there are and I need to know how much will be deducted from that 8$ (I am not talking about tax, I meant just fees) I mean what numbers are involve in this that I have to ask or figure out for "Foo" itself or brokerage disclosure.