buy puts on 3X bear funds

[mikeenday]

easy money.

 

[Bob111]

sure is..if you buy them at the right time..timing is everything..

 

[dragonman]

Quote from mikeenday:

easy money.

Why puts? If you think the market is going down you should buy calls, not puts, on bear funds (I assume you refer to funds that have a short position on the underlying).

 

[efficiency]

Quote from mikeenday:

easy money.

Really?


I'm inclined to thinking there is NO free lunch.

 

[deltahedge]

vol on levered ETFs tends to be extremely overpriced so I'd remain hesitant on buying puts on these 3x bear funds. moreover with 3x leverage, overtime you have to deal with the lovely statistical issue of autocorrelation.

 

[c.chugani]

Quote from mikeenday:

easy money.

bullish?

 

[KINGOFSHORTS]

Quote from deltahedge:

vol on levered ETFs tends to be extremely overpriced so I'd remain hesitant on buying puts on these 3x bear funds. moreover with 3x leverage, overtime you have to deal with the lovely statistical issue of autocorrelation.

Wait till the new 8x funds in 2012

 

[tickmagnet]

The best instrument to trade is SPY options , that's all you need.Nothing else.

 

[KINGOFSHORTS]

Quote from tickmagnet:

The best instrument to trade is SPY options , that's all you need.Nothing else.

and iwm also.

 

[loufah]

Problem is, as the bear funds drop as the market recovers, those put options are going to see their IV plummet, and the options won't go up nearly as much as you'd hoped. I usually trade long options, but for the past two weeks they've been too expensive so I've gone long in bull funds like FAS.