Why not gamma scalp with otm strangles? Although the bid/ask spread for the options and the underlying is quite expensive, the extreme moves and the price decay works in favor of a long strangle with gamma scalps. The big risk with this approach is Implied Volatility... However, as was stated - "there's no free lunch"... Walt
Averaging down is already a bad idea.With leveraged ETF it's a bad bad bad idea. The problem is that all the leveraged etf's will drop in value waaay faster than they gain and it takes a very sustained move over many days to get them back up.in this market once you have a 3 or 4 day move it's very tough to recover...There is a reason they had to do a reverse split on FAS a while back. Look at SRS - this was at 300 a while back. Averaging down would not have worked unless you had an almost infinite supply of cash...
It's hard to tell looking at charts because they do reverse splits all the time to jack the price back up. FAS and FAZ both almost went down to zero. If you'd shorted both then what ever was lost in one day by FAS would be recovered by FAZ but magically they both end up at zero. They say the best place to hide the great scam is directly in the public eye.