Time to buy calls on the Bear ultrashort?

CFA General
#1

Discuss.

#2

The only way you can make money on leveraged ETF is if the mkt follows a trend up or down. However, volatility seems to be elevated those days, so the strategy will not work. Eventually volatility will erode the price.

#3

mik82 Wrote: ------------------------------------------------------- > The only way you can make money on leveraged ETF > is if the mkt follows a trend up or down. However, > volatility seems to be elevated those days, so the > strategy will not work. Eventually volatility will > erode the price. That’s why you short both the long and short leveraged ETF. Doesn’t matter what it tracks, over time you win.

#4

What’s the advantage of buying calls on an ultrashort etf over buying puts on the overall market?

#5

Sweep the Leg Wrote: ------------------------------------------------------- > mik82 Wrote: > -------------------------------------------------- > ----- > > The only way you can make money on leveraged > ETF > > is if the mkt follows a trend up or down. > However, > > volatility seems to be elevated those days, so > the > > strategy will not work. Eventually volatility > will > > erode the price. > > That’s why you short both the long and short > leveraged ETF. Doesn’t matter what it tracks, > over time you win. Yeah that’s true, It worked well for FAS/FAZ, but I am not going to do it.