Zac

Arbitrage Opportunity in Ultra ETFs

Irish,
But in the above example the S&P went up 5%, so if he was net short wouldn't he have lost money as opposed to returning 1.715%?
Thank you for your posts, very interesting stuff.

On May 05 05:54 PM Luck-o-the-Irish wrote:

> Do the math...long $50 SPY is long $50, short $100 SSO is like being
> short $200 SPY, and being short $50 SDS is like being long $100 SPY,
> so you are NET short in this portfolio, which is the real reason
> for the decline in 2007 and the rise in 2008 ($50+$100-$200= - $50).
>
> However, this idea holds merit. We use a similar setup like this
> in our hedge fund as part of the strategy; however, there are overlay
> and advantages when adding in option arbitrage trades (InterETF spreads)
> that we have also pioneered. Obtaining the shares to short is VERY
> difficult. Fortunately, we have been able to locate and obtain shares.
> If any qualified investor would like to know more, please shoot me
> an email.

3 Currencies to Think About Shorting

I also believe the British pound is going to depreciate, at least against the Euro and some Asian currencies, is there a cost-effective way for an ordinary investor to short the pound?