ProShares New Triple ETFs: Next Big Thing?

Yesterday morning ProShares launched two new triple ETFs. Now before you exclaim, “Enough already!” consider that the new ETFs are designed to track the daily moves of the S&P 500 index. As such, these are the first 3x and -3x ETFs that track the SPX directly. For this reason alone, the two new ETFs are can’t miss products. While these triple ETFs will have some interesting hedging applications, the fact that they have a target tracking period of one trading day, like the Direxion Daily ETFs, means they will probably become very hot in the day trading space. Don’t be surprised to see 100 million shares traded in both of these within a few months.

The official names of the new ETFs are the Ultra ProShares (UPRO) and Short ProShares (SPXU). For more information on these ETFs, check out their prospectus.

Comments

[Brian Benda:]

Have you considered a trading strategy where both directions are shorted? If you have the ability, sum and chart each of the Direxion pairs. Had you shorted the pair on the day of their release you would be way ahead right now on each. Unless I am looking at this wrong, it appears as though maximum draw down on any of these trades was about 30%.

Jun 26 09:47 AM

[IancoleTX:]

I was just thinking the same thing. Being that these are both fresh to the market and trading at relatively high volumes, this may be a unique opportunity.


On Jun 26 09:47 AM Brian Benda wrote:

> Have you considered a trading strategy where both directions are
> shorted? If you have the ability, sum and chart each of the Direxion
> pairs. Had you shorted the pair on the day of their release you would
> be way ahead right now on each. Unless I am looking at this wrong,
> it appears as though maximum draw down on any of these trades was
> about 30%.

Jun 26 10:17 AM

[IancoleTX:]

Values, not volumes. Sorry, no coffee yet today.


On Jun 26 10:17 AM IancoleTX wrote:

> I was just thinking the same thing. Being that these are both fresh
> to the market and trading at relatively high volumes, this may be
> a unique opportunity.

Jun 26 10:17 AM