Leveraged ETF Options

David Folster

David Folster

Hi all. Does anyone know if there is good liquidity in leveraged ETF options, and if so, which ones are best? I would be looking for leveraged ETF options that mirror the major indices....S&P, Dow, Nasdaq and Russell 2000.

Second question...is the liquidity of a particular stock usually indicative of the liquidity of the stock's options?

Thanks for your help.

David
 
The index ETFs I play are SPY,QQQ,RUT....the liquidity is good, bid/ask is pretty tight.
But if you are asking about the 3x volatility shares etc just google it (direxion shares, pro shares) there are a bunch of them. But the liquidity is usually not as good.

The liquidity of a stock does not mean the options are necessarily as liquid. Just look at the bid/ask spread. You can pick your poison from there. But if you are just trading small lot sizes and there is plenty of open interest and good volume you can usually get a good mid-market fill even if the spread is a little wide.

Personally I prefer to stick with bid/ask spreads of a nickle or less. For a beginner this might be a good guideline until you learn why and when you can go a little wider.
 
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