buy puts on 3X bear funds

Discussion in 'Options' started by mikeenday, Aug 4, 2011.

  1. mikeenday

    mikeenday Guest

    easy money.
  2. Bob111


    sure is..if you buy them at the right time..timing is everything..
  3. Why puts? If you think the market is going down you should buy calls, not puts, on bear funds (I assume you refer to funds that have a short position on the underlying).

  4. Really?

    I'm inclined to thinking there is NO free lunch.
  5. vol on levered ETFs tends to be extremely overpriced so I'd remain hesitant on buying puts on these 3x bear funds. moreover with 3x leverage, overtime you have to deal with the lovely statistical issue of autocorrelation.
  6. bullish?
  7. Wait till the new 8x funds in 2012
  8. The best instrument to trade is SPY options , that's all you need.Nothing else.
  9. and iwm also.
  10. Problem is, as the bear funds drop as the market recovers, those put options are going to see their IV plummet, and the options won't go up nearly as much as you'd hoped. I usually trade long options, but for the past two weeks they've been too expensive so I've gone long in bull funds like FAS.
    #10     Aug 16, 2011