Hi, I've the feeling (as I couldn't test them all yet, just a few only) that the 3x leveraged ETFs are the best vehicles to trade for options traders. Some examples: DUST, JNUG, ... What is your experience with and opinion about such leveraged ETFs?
My scanner finds very profitable trades with such ETFs. Not sure, maybe these ETFs don't have any MMs? Can this be true?
[/QUOTE] then switch to being an etf trader from being an options trader if you can. "that the 3x leveraged ETFs are the best vehicles to trade for options traders." if you are an options trader the best trading vehicle is options not some other instrument of trading. the remark makes no sense.
Your scanner is not taking into account the wide markets and high margin requirements of these products. Good luck getting in and out without losing your vig. Good luck....
Hmm. you could be right if ETF options have different margin requirements, I'll need to check this. Thx for the info. Update: Yes, the margin requirements for leveraged ETFs are indeed much higher: http://ibkb.interactivebrokers.com/node/1124 Ie. 90% for 3x :-( Then I think I better should forget trading ETFs and ETF options.
How good is the volume? Some of these ETFs have so low volume you would be buying & selling at the MM's very wide spread. Or unable to exit/enter a position for so long that the opportunity passes. Perhaps you were thinking: Option gives Leverage 3x ETF gives Leverage Leverage on a Leverage!!! True in theory, but not so much in practice. Although if you are avoiding margin accounts (or going into margin) it could be an option (no pun intended). But you might find better liquidity at 2x.