Luck-o-the-Irish

Understanding Triple Leveraged ETFs

Shares are difficult to borrow, but not impossible. We do it on a daily basis. Furthermore, you can use synthetic shorts. Also, just shorting both sides can be done, but in a sharp trend...hmmm...let's see, like late Feb or Mid March, you better have a heck of a lot of capital, because for how the compounding can help you over the long run, it can crush you over the short run. Just look at the latest run by FAS versus the drop in FAZ. Being short both, just during the downtrend or uptrend, would have resulted in HUGE losses, so unless you had the capital and/or margin room, a person may not have been able to wait for a reversal. If you had gone short both right around SPY 670, you'd still be waiting for that reversal and well underwater. Squark62 has a solid concept. Our firm's concept is a bit different, and done in more of an arbitrage format, and yes, we short these things and hold, but it is a concept more formulated, and protected, than just flat out shorting both sides. If you are wishing for the inventory to short both sides, and that is all you are doing...be careful what ou wish for and have a LOT of capital for your position.