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losemind

Registered: Dec 2010
Posts: 75

08-30-12 06:42 PM

Bull etf or Bear etf, which one to use?

Hi all,

If I want to express a bullish view on SP500, I have two theoretically equivalent options (I am thinking of 2x or 3x):

1. Long the bull 3x etf
2. Short the bear 3x etf

The holding period is probably 3 months, 6 months and 12 months.

Which one shall I hold, the bull or the bear?

Thank you!

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sledgeyum

Registered: Jun 2011
Posts: 179

08-31-12 01:00 PM

Neither. Read the Damn perspective.

Use spy for long term.

Quote from losemind:

Bull etf or Bear etf, which one to use?

Hi all,

If I want to express a bullish view on SP500, I have two theoretically equivalent options (I am thinking of 2x or 3x):

1. Long the bull 3x etf
2. Short the bear 3x etf

The holding period is probably 3 months, 6 months and 12 months.

Which one shall I hold, the bull or the bear?

Thank you!

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WinstonTJ

Registered: Jan 2009
Posts: 1947

08-31-12 05:18 PM

Well, shorting the short to give you long exposure is the sensible thing to do given that you will be able to collect the value of the price decay.

As stated above, I would read the prospectus because levered ETFs give you DAILY returns not monthly or yearly. They are NOT made for long term buy & hold investments. If you want leverage try using options on an index or non-levered ETFs.

Take a look at the long term performance of UPRO and SPXU vs. SPY and the S&P.

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losemind

Registered: Dec 2010
Posts: 75

08-31-12 08:54 PM

Quote from WinstonTJ:

Well, shorting the short to give you long exposure is the sensible thing to do given that you will be able to collect the value of the price decay.

As stated above, I would read the prospectus because levered ETFs give you DAILY returns not monthly or yearly. They are NOT made for long term buy & hold investments. If you want leverage try using options on an index or non-levered ETFs.

Take a look at the long term performance of UPRO and SPXU vs. SPY and the S&P.

What's the fee structure of borrowing for shorting?

Given the well-known price decay I would imagine it's pretty expensive to short?

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jb514

Registered: Apr 2011
Posts: 134

09-04-12 12:35 AM

Most leveraged etfs cost a fortune to borrow. Just trade the SPY

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axolotls

Registered: Sep 2012
Posts: 16

09-04-12 04:56 PM

In theory shorting every 2x and 3x ETF would be amazing.

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