The Rise of Tripled Leveraged ETF's

Quote from winstontj:

depending on your trading platform - yes you should be able to buy on margin...
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WOOOOOO HOOOOOOOOO! SHOOT FOR THE MOON!!!!!!!!
 
I trade pairs.. I bought 1000 UYG which is a 2x and sold puts on FAZ...the premiums are great...and so is the hedge..

Another trade I put on is buying FAS with out of the money covered calls...and selling next month puts on FAZ....so far making money and not getting hurt by extreme volitily...:D
 
Quote from winstontj:

depending on your trading platform - yes you should be able to buy on margin...
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No.

At least not legally.
Maximum leverage is 4X, as issued by the SEC.
 
Quote from plan:

These 3x ETF's suck for long-term holders, slippage is excessive. Great for daytraders but horrible for investors.

Take a look at SRS, short commercial real estate, at the lows for the year. WTF!
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Why would a long term investor worry about a few cents of slippage?

The 3X is approximate.
May actually be more or less than 3X.
 
its really 3x... (minus fees & expenses in the small print).

I did not know that SEC max is 4x leverage, is that for an individual investor? I'd like to see the specific rule because many prop firms offer 4x margin but then those traders could go out and buy a 3x ETF.

I don't use margin in my account because I don't day trade for a living but I'm pretty sure E*Trade would let me use my margin to purchase 3x etfs, perhaps though, only up to 4x... not sure.

Also - if you can short these ETFs, and then (with paying interest) use the proceeds to buy something else, you can essentially be 9x (or higher) if you short the short and buy the long, or vice versa. Perhaps this is only a hedge fund tactic though as I have not seen any individual actually do this.
 
Quote from winstontj:

its really 3x... (minus fees & expenses in the small print).

I did not know that SEC max is 4x leverage, is that for an individual investor? I'd like to see the specific rule because many prop firms offer 4x margin but then those traders could go out and buy a 3x ETF.

I don't use margin in my account because I don't day trade for a living but I'm pretty sure E*Trade would let me use my margin to purchase 3x etfs, perhaps though, only up to 4x... not sure.

Also - if you can short these ETFs, and then (with paying interest) use the proceeds to buy something else, you can essentially be 9x (or higher) if you short the short and buy the long, or vice versa. Perhaps this is only a hedge fund tactic though as I have not seen any individual actually do this.
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Prop firms leverage is illegal, that's why they were cracked down.
 
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