Saturday, August 8, 2009

2X and 3X Vehicles

No I don't mean oversized cash for clunkers.

I mean leveraged trading tickers.

You can't get leverage without paying a fee or taking a higher risk. These are NOT BUY AND HOLD. You will be decimated even if you are correct on direction.

2X and 3X stuff is created with options, which have diminishing time value.

If you buy options directly you have diminishing time value working against you.

If you buy futures you are subject to having your stops "hunted" down in the middle of the night when open interest is much less, and hunting is more sucessful for those running the Hal 9000's.


SDS and SSO are awesome daytrading vehicles, the liquidity is so high, you are protected from a manipulative stop hunt, and they trade to the penny. Options have higher bid ask spreads and that works against you.


  1. Loaded up SRS calls late this week. Ahhhhh, the sweet smell of leverage!

  2. Nothing wrong with leverage, my only real point is that is comes at a cost...

    Good Luck!!!!!


Insightful and Useful Comment!