Looks like there are options on them as well (yay!): though I'm not noting any open interest so far, and the bid/ask spreads are all larger than the options' premia, so I think I'll wait a year myself....!
bzbtrader
· 1 year ago
Bill, You need to look at some pictures of snakes and calm down a bit or you're going to stroke out chasing the BGU/BGZ. First of all the spread on this pair is running .06 -.15 depending on momentum. IMHO, if you really want to stick your hand in the fire, BGU is the way to go, either long or short. It's got half the price, double the volume and better spreads then the BGZ. Probably best traded with with an algorithmic auto trade system to control risk, although the whipsaws can be VERY costly, so have a lot of risk capital handy. Also, in terms of % change elative to the IWM, BGU/BGZ trade more like doubles than triples.
Mark Wolfinger
· 1 year ago
I don't understand the need for these double and triple ETFs. Commissions are low enough these days that reduced commissions cannot be the driving force behind these vehicles.
All these products do is make it easier to use the stock market for gambling, rather than investing. I do recognize that the market itself has been a casino in recent times, but that's no reason to entice the public into gambling.
IMHO these should never have been allowed and should be forced off the market. Yes, I know - that will never happen.
Why do you want to trade them?
Anonymous
· 1 year ago
looks like in a few weeks some of these ETFs will go to zero.
Jimmy
heywally
· 1 year ago
Assuming you're willing to take a minimum approx $40,000 (S&P index equivalent) position (with 1 contract), why not just trade the ES futures which are totally liquid, have great spreads around the clock, and allow you to respond to overseas markets activity either in the evening or pre-market?
Anonymous
· 1 year ago
hey mark
you hit the nail on the head
"to entice the public into gambling"
and that is exactly what this market is turning into
lots of ridiculous individuals have decided to trade for a living recently after watching fast money on CNBC and want to trade their $10,000 account into millions within couple years.
Not to mention tons of college kids with less than $5,000.
I mean their account don't even allow day trading and yet here they are trying to get as much leverage as possible to make some money.
What's even more ridiculous is that since their non margin account dont allow pattern day trades, they are even jumping in to the emini futures.
CNBC really changed the markets.
It's a joke more than serious investing.
I mean I am a full time technical analyst but it's funny to see all these people laying out fibonacci levels and drawing trend lines left and right and calling for a market crash so they can make couple hundred bucks in their 10K account.
They should blow up their accounts and that willl teach them a lesson.
afinanceguy
· 1 year ago
These vehicles are similar to no limit holdem games that play quite deep but will often have very low minimum buyins. A $100 minimum buy-in table where the typical open raise is $20 for example. This type of structure gives a small-stakes player a round or two to try to pick up some cards and a giant rush when they eventually push all-in with whatever mediocre hand they ultimately choose to get behind--but it rarely ends well.
Fatty
· 1 year ago
Levered ETFs and short ETFs seem like the biggest scam ever to me.
The groups that manage these funds that manage these take a huge percentage (95 basis points for Direxion funds, I think) and there is also no guarantee that the ETF approaches the targeted leverage ratio.
Read more about why I think the Triple ETFs aren't a very good strategy at my blog, FattyFatFat.
Celal Birader
· 1 year ago
I don't know about the 3x variety; but, i have successfully used the 2x sectoral ultra shorts as a hedging tool against long positions held in the relevent sector.
As a result, i've been able to come back from a number of positions which have gone underwater since i had bought them in October.
Bill Luby
· 1 year ago
Two weeks later, it looks like my prediction has already come true. Bespoke has the details in 3x ETFs on Fire
All Comments
You need to look at some pictures of snakes and calm down a bit or you're going to stroke out chasing the BGU/BGZ. First of all the spread on this pair is running .06 -.15 depending on momentum. IMHO, if you really want to stick your hand in the fire, BGU is the way to go, either long or short. It's got half the price, double the volume and better spreads then the BGZ. Probably best traded with with an algorithmic auto trade system to control risk, although the whipsaws can be VERY costly, so have a lot of risk capital handy. Also, in terms of % change elative to the IWM, BGU/BGZ trade more like doubles than triples.
All these products do is make it easier to use the stock market for gambling, rather than investing. I do recognize that the market itself has been a casino in recent times, but that's no reason to entice the public into gambling.
IMHO these should never have been allowed and should be forced off the market. Yes, I know - that will never happen.
Why do you want to trade them?
Jimmy
you hit the nail on the head
"to entice the public into gambling"
and that is exactly what this market is turning into
lots of ridiculous individuals have decided to trade for a living recently after watching fast money on CNBC and want to trade their $10,000 account into millions within couple years.
Not to mention tons of college kids with less than $5,000.
I mean their account don't even allow day trading and yet here they are trying to get as much leverage as possible to make some money.
What's even more ridiculous is that since their non margin account dont allow pattern day trades, they are even jumping in to the emini futures.
CNBC really changed the markets.
It's a joke more than serious investing.
I mean I am a full time technical analyst but it's funny to see all these people laying out fibonacci levels and drawing trend lines left and right and calling for a market crash so they can make couple hundred bucks in their 10K account.
They should blow up their accounts and that willl teach them a lesson.
This type of structure gives a small-stakes player a round or two to try to pick up some cards and a giant rush when they eventually push all-in with whatever mediocre hand they ultimately choose to get behind--but it rarely ends well.
The groups that manage these funds that manage these take a huge percentage (95 basis points for Direxion funds, I think) and there is also no guarantee that the ETF approaches the targeted leverage ratio.
Read more about why I think the Triple ETFs aren't a very good strategy at my blog, FattyFatFat.
As a result, i've been able to come back from a number of positions which have gone underwater since i had bought them in October.