Short 3x etf is very high % win trade if we dont include borrow cost?

Discussion in 'ETFs' started by GloriaBrown, Oct 28, 2020.

  1. There is always just 3 output everyday with around this %:

    raise 10%
    sideways 80%
    drop 10%

    Short 3x etf would have 90% winning chance

    Of course you would say borrow cost is crazy high

    But it is not true for all 3x etf

    Agree or not?
     
    murray t turtle likes this.
  2. SanMiguel

    SanMiguel

    Do you understand daily rebalancing?
    Such that you lose even in a sideways market
     
    KCalhoun likes this.
  3. guru

    guru


    I think he/she talks about shorting those ETFs, making money from those ETFs losing value. The risk would be to the upside.
     
  4. BKR88

    BKR88

    I shorted a basket of leveraged ETFs for a while.
    Short them in pairs so TNA & TZA, NUGT & DUST, etc. so you're always long & short in the same market.
    In the long-run you'll win. The problem is you need to keep a good amount of spare margin available because occasionally these leveraged ETFs go crazy to the upside. Short @ 10 and suddenly it's 100. :) Initial investment was 10K and now it's 100K. Yikes!
    I was profitable with the strategy but with a strong move it can take considerable time to get back to break-even and with the spare margin required I decided it wasn't worth it.
     
    KCalhoun, lindq and guru like this.
  5. Yes exactly
     
  6. wmwmw

    wmwmw

    There are people doing this for long time. It is just as selling out of money options.
    The risk is in the tail event and don't let it blow up your account.


     
  7. The risk is lower than short option. The exposion of long option can be so high. 3x is always 3x.
     
  8. wmwmw

    wmwmw

    Not really. If you short options with a small portion of your account, the risk is also low.
    It all depend on how much you want to win, so that how higher the risk you want to tolerate.
     
  9. %%
    NO, not really;
    but on a good downtrending day like WED, today/may be worth your while??
    Wisdom is profitable to direct...……………………………………………………………………………………………………...
    The inverse moves much , much different from long x3 ETF...
     
  10. traider

    traider

    How were the fees like when you were holding them short?
     
    #10     Oct 28, 2020