shorting triple leverage ETF pairs for deterioration

Quote from sle:

You can easily solve for a break-even borrow.
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Borrow rate changes from day to day.

You probably have to be a BD...
With a favorable contract with your Clearing Firm...
To do better then retail via IB...
The Stock Loan business is very sophisticated these days...
With borrow rates set on Stock Loan exchanges.

It's a huge profit center for Wall Street.

But these ETFs are complex and arcane enough...
That just understanding them correctly...
Can probably give you a competitive edge.
 
Quote from chuckybrown70:

that is a great question and since i am a nice guy i will answer.

at IB they have a short position interest rate that they post on thier site.

i think i pay 5.5% anual for fas and 1.5% for faz. not sure, what it is today, but that was what it was about 3 months ago.

and the reason he would short, is becasue there is a time decay. it is a no brainer and the right way to play it.

do your thing... gl... but there is a small catch so be careful. pm me and we can discuss
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I found someone answered this a couple years ago.
The borrow cost is indeed high at IB.

You can borrow for free at Scottrade, but the shares often won't be available, or in a declining market you are forced to "buy-in" your position.
 
Quote from peilthetraveler:

What carry costs are you talking about? I short FAS/FAZ or whatever and I earn interest on the money I receive from short until I close out the position.
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No interest on short stock these days. And you'll be charged for carrying these short positions. Who do you trade with?
 
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