Margin question

[wmwmw]

Hi,
If I buy a bull ETF and short its bear ETF in a margin account,
what would be margin effect? Could I hold very big position (much bigger than my actual buying power)in both ETF?

 

[globalarbtrader]

Hi,
If I buy a bull ETF and short its bear ETF in a margin account,
what would be margin effect? Could I hold very big position (much bigger than my actual buying power)in both ETF?

Yes, in theory, but why would you do this? You would have a perfectly hedged position that would consistently lose money....

GAT

 

[wmwmw]

No.
I meant I short a bull ETF and short its bear ETF.

 

[InfoTech]

If he buys the bull symbol and shorts the bear version he would not be hedged.

Yes, in theory, but why would you do this? You would have a perfectly hedged position that would consistently lose money....

GAT

 

[wmwmw]

If he buys the bull symbol and shorts the bear version he would not be hedged.

You are right.
This doesn't work.

 

[InfoTech]

No.
I meant I short a bull ETF and short its bear ETF.

OK. Which symbols? And what type of margin account, portfolio margin or Reg T?

 

[wmwmw]

Reg T.

 

[globalarbtrader]

If he buys the bull symbol and shorts the bear version he would not be hedged.

I'm a muppet. Didn't read the post properly.

GAT

 

[InfoTech]

OK. Which symbols? And what type of margin account, portfolio margin or Reg T?

 

[InfoTech]

Reg T.

No extra buying power under Reg T for this strategy.