Hi All, Lately I have been fascinated with a couple of ETFs in the leveraged/alternative ETF space. Out of the entire ETF market this sector only amounts to roughly 4% of all ETFs. It is extremely easy to get burned in these stocks because of Contango and the sheer amount of leverage in some of these investment options. What I would like to know is, does anyone have a trading strategy for these investments? My watch list includes GASL, TVIX and TZA. I have made some considerable gains in these ETFs by anticipating macro economic moves, but I would like to know if any equity traders are playing with these stocks by possibly using options or other hedging mechanisms. I look forward to the discussion.
If you can find shares to borrow, short both the ultralong and ultrashort ETFs. If you’re doing any thing more than bleeding money in your own account, use futures.
I’ve posted about this several times. It definitely works. Very boring, but it works. Only problem is having your shares called back by your broker. I stopped doing it because I was never able to hold my short positions longer than a few weeks.
Which broker do you use? Any time I ever looked, shares were unavailable to borrow. I have not looked in a long time though.
It’s been a while for me too, but Scottrade usually had them available, just didn’t let me borrow them for long.