Landis discussed DUG's components making the point it's important to know what's in the index you're trading. But the original post also mentioned EEV and FXP so I think it was more about the more overarching misconception that leveraged short ETFs are longer term trading vehicles when in fact they seek daily results.
There are correlation calculators out there on the internet. PM me if you want the link to the one that I am most familliar with. ETFs mostly track indicies - think of them as 40 Act funds with intra-day liquidity. Add leverage and they get tricky - add optimized baskets and tracking issues and they can get confusing - but they are still just mutual funds with intra-day liquidity. There is a clear difference between a 40 Act mutual fund and an ETF - but they are generally proxies to commodities due to restrictions and liabilities. That's an important thing to know because marketing does not always represent that (in my opinion).
Arizona, most etf's underlying value is the ticker .iv - across the board with many companies. Look at the differences and watch, occasionally you will see a market maker go down and a specific exchange will have an offer at a premium/discount that you can capitaliza on - if not it will mostly be corrections at the open or market action at the close.
If you calculate different scenarios you'll get a good feel for it... and if you calculate "synthetic" double short ETF prices and compare them to the actuals you'll validate it.
That's the point of this thread and the point I was making, you jackass. You're quoting me out of context.
I remember reading somewhere that Arizona said his holding period is weeks. You're like ebay customer support -- mindlessly giving canned answers to questions not asked.
I typically enter into options positions such as spreads, condors, butterflies and strangles or combinations of the above. If the underlying is an equity, I sometimes scalp. The holding period varies depending on the position and the underlying. The idea of arbitrage on ETFs is interesting. I was not aware that the retail guys had a chance to arb these things. To be honest, I would not even know where to start (or if I should ). AZD
Winston, Thanks for taking the time to respond. Would you perhaps be able to give a specific example of how a retail guy might open and close an arb opportunity using the SDS as an example? Thanks. AZD