question about 3x etfs

Discussion in 'ETFs' started by brad52, Jan 28, 2010.

  1. brad52


    I was looking at FAS and FAZ today. One thing I noticed while

    watching the option chain was that while FAS was down less than a

    dollar both the calls and puts were trading at a loss!!! The put should

    have been showing some kind of minimal gain to offset the loss

    suffered by the call. What gives? Is there something in he nature of

    the leverage? Any thoughts? Just trying to be logical. Thanks.
  2. Options premium on 3X etfs were killed today because of the drop in volatility. Did you look at VIX today?
  3. wouter


    Market direction is only one piece of that puzzle, volatility and time decay the other and don't forget that options pricing fluctuates a lot. It is probably the most inefficient pricing I have seen in the markets despite many arbitrage house working those markets.