I am having a little trouble understanding the idea of a Bullish and Bearish ETF for the dollar... I understand the dollar is pitted against other currencies in forex trading, and I am not sure if this is why there would be 2 ETFs - one for bull and bear; however, I would think just one could show the general direction of how the dollar is performing. Could someone explain why there are 2 ETFs, and how might someone trade them, or even better analyze them to determine the dollars strength. Thanks TJ
There are two because not everybody can short an ETF. Some accounts can only be long equities and ETFs. This gives those accounts the opportunity to bet each direction .
I would think just like any market it can be going up, down, or sideways but only one at a time. How can the dollar be doing both? I guess that is where my confusion is.
How is it? Almost all bullish or bearish ETFs are just indexed to a given direction. If it's sideways they both sit relatively unchanged. My recommendation for dollar speculation would be to use DX futures (which said ETFs may even be backed by as well).
An investor or speculator who is optimistic about the outlook for the U.S. dollar against other currencies. A dollar bull expects the U.S. dollar to rise in value compared most major currencies over time, and will take this factor into consideration when positioning
So oi other words if the dollars value is falling the dollar bear would rise allowing an individual to be long in a falling market?
I wrote a article a while back on trading the Dow based ETF's using the dollar index. I though it would contribute to this thread. Click here