Hi Traders, Which broker(s) would you recommend for taking short positions in leveraged ETFs like those of Proshares and Direxion? I know of one trader who was short FAS and FAZ simultaneously and his shares were "bought in" by Interactive Brokers at an inopportune moment, so it does happen. I know Fidelity never has leveraged ETFs available to borrow, so they're out. NobleTrading is pretty good about getting them, especially the Proshares ETFs, but they're spotty with Direxion. So who are your picks? Thanks very much to all, Steven
Well I have to say don't use E*Trade for buying/selling ETFs on margin, they have special margin requiremnets for some ETFS, especially the leveraged ETFs. I happen to like E*Trade for other reasons, but not having margin for use with my favoriate ETFs (FAS,FAZ) is a little disappointing.
Almost every leveraged ETF has a corresponding inverse ETF. Just find these and buy them, so you don't have to find shares to short. You also avoid a margin position.
I would really like being able to use my margin on these positions though, as I showed my favorites are FAS and FAZ which is the inverse position. Imagine a 4:1 leverage on a 3x leveraged ETF. Yes I know the losses are just as augmented. Hopefully though one who is trading (margin or not) is placing smarter bets and is moving ahead in value rather than behind.