In the past couple years inverse and leveraged ETFs have been some of the most highly traded securities because of their seemingly "cool" concept for speculation. I mean where else can you get such high exposure to financials or gold than with a 3X bull/bear ETF?
Now this is not to say that you shouldn't trade inverse and leveraged ETFs because I have before and will in the future. Instead, my goal is to make you smarter about how they derive their pricing so that your timeline for trading them might be adjusted or altered.
I never promised this podcast would be a walk in the park, so if you are ready to be challenged and take your training to the next level then let's get started.
In Today's Show, You'll Learn About:
- My quick thoughts (or rank) on what it takes to be consistent as a trader long-term.
- What are leveraged ETFs (2x Bull or 3x Bull)
- Examples using FAS, NUGT, FAZ, QID and SDS
- What are inverse ETFs (2x Bear or 3x Bear)
- How these products can help you hold bearish positions in an account that prevents shorting stock.
- Why they could give you increased exposure for seemingly less cost.
- The major flaw most investors make by assuming they are $ for $ move related.
- Proof of the "negative" drag that occurs in most leveraged products regardless of the directional assumption.