User 305589

Option Spreads With Large Upside and Limited Downside

hm, let me get this straight: you talk of 'large upside and limited downside' - yet when looking at your vertical call spreads that you suggest, you have an upside of 108-150% and a downside of - 100%(!!)
I am myself doing a variety of vertical call spreads as well as calendar spreads, but frankly, your suggested trades look more like a gamble.
Your strike prices are so precariously close to each other and at the same time mostly out of the money and pretty near to expiration. For instance, the SPY calls with 92 strike have only a slightly higher probability of expiring in the money than have the 93s. It's basically a coin toss, imho.

I do like call spreads, though, but I use them either with long term options for stocks that are grossly undervalued imo, and then I go quite deep out of the money for 3.1 or 4:1 upside/downside.
Or I may target stocks which I consider to be a t rock bottom valuations with very little downside left and then chose calls that are in the money while selling calls at or slightly out of the money.

Leveraged ETFs: Is Tracking Error Really So Troublesome?

sorry, but this is nonsense. you will lose money big time the longer you hold xETFs. For instance, over the past 12 months, if you had bought FAS and FAZ which are supposed to be just inverse on a daily basis (one 3x bull, one 3x bear) you would have lost 93% on the one and another 35% on the other. Free money for the creators of the ETF. a huge empty bag for the buyers and holders of this crap.


On Mar 21 01:24 PM squark62 wrote:

> well marc, you sure stirred up hornets nest. as i've pointed out
> many times, pairing up long & short ETFs that specifically follow
> the same index (directly or inversely) is an excellent what to establish
> a hedge. the hedge can be correlated, non-correlated or neutral.
> it's up to the trader. weighted properly, using this type of method
> of hedging you effectively create your own asset class. this enables
> investors who manage their own ira to hedge since options trading
> is not allowed in retirement accounts, but holding these ETFs are.
> interested? checkout www.equityinformatics.com

Leveraged ETFs: Is Tracking Error Really So Troublesome?

nice work on daily tracking errors - but it completely misses the big picture. let's take FAZ/FAS as an example. If you had bought both of them one year ago you should expect that one would be up and the other one down or both little changed, no? Wrong.
FAZ is down a whopping 93% - and FAS is up, wait, it is down, too, though 'only' by 35%.
Go figure. You can talk about daily tracking errors as long as you want. At the end of the day the leveraged ETFs are for daytrading or a few days holding periods only or else they will ruin you, no matter what the market does.

finance.yahoo.com/echa...;range=1y;compare=faz;...