- Market-Makers [MMs] know when their big-money fund clients see that this 3X leveraged ETF is poised for its periodic rally of +10% in a month or two.
- They tip their hand in the way they hedge the firm's capital that must be put at risk to help the clients get their desired position in a tight market.
- Their shorts are protected against a price increase above $88.60, up from $80.60.
- The cost of that price protection comes right out of their trade spread, and wouldn't be spent if it wasn't needed. Both buyers and sellers of the insurance agree.
- Prior protective behaviors have had the expected outcomes in every case before - but no guarantees can be made.