Comments on: Darwin’s Inverse Leveraged Short ETF Strategy – Incredible Results Outlined http://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/#utm_source=rss&utm_medium=rss&utm_campaign=short-etf-inverse-leveraged-direxion-3x Financial Evolution: Education, Adaptation, Achievement Sat, 31 Jul 2010 09:59:38 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Harryhttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-6420 Harry Tue, 20 Jul 2010 04:23:04 +0000 http://www.darwinsfinance.com/?p=1710#comment-6420 Looks like this will win most of the time, also I would suggest that we use calls to protect against massive in one direction. Example if FAS is at 20.11 when you begin to short buy a cheap call at say $ 28 or 27. This way even if the ETF goes 35% in one direction the max loss is capped off. Ideally I would suggest that short the ETF pair and buy a way out of the money call and a put. This way you are completly protected against any massive moves in the market like Mar 09 or Sep 08. Also I think we may have to reset the position every month not sure if that is a good idea. By reset I mean get rid of the ETF pair, take profit/ loss and start over again with options. rvharry79 at yahoo.comI am not a expert please evaluate your own risk before shorting because shorting can lead to infinite loss. Looks like this will win most of the time, also I would suggest that we use calls to protect against massive in one direction. Example if FAS is at 20.11 when you begin to short buy a cheap call at say $ 28 or 27. This way even if the ETF goes 35% in one direction the max loss is capped off. Ideally I would suggest that short the ETF pair and buy a way out of the money call and a put. This way you are completly protected against any massive moves in the market like Mar 09 or Sep 08.
Also I think we may have to reset the position every month not sure if that is a good idea. By reset I mean get rid of the ETF pair, take profit/ loss and start over again with options. rvharry79 at yahoo.com

I am not a expert please evaluate your own risk before shorting because shorting can lead to infinite loss.

]]> By: Michael Mauricehttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-6395 Michael Maurice Thu, 15 Jul 2010 21:29:57 +0000 http://www.darwinsfinance.com/?p=1710#comment-6395 Are you still tracking this strategy? I haven't seen an update in a while. Are you still tracking this strategy? I haven’t seen an update in a while.

]]> By: Ajdedohttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-6343 Ajdedo Tue, 06 Jul 2010 10:27:51 +0000 http://www.darwinsfinance.com/?p=1710#comment-6343 I'm so glad I found this site. I've been thinking about this concept for a year, but never heard anyone else talk about it before. Thanks!I understand the basic concept, but I'm a bit uncertain about the math regarding balancing the ETFs. Especially when I could not buy them on the same day.For example:Let's say I shorted 100 shares of SRS @ $29. It is now @30 and I'm down -$100. Finally some URE is available to short, and it is trading at $34. How may shares of URE do I need to short to balance the 2 pairs of ETFs?Would it be 88?Thanks! I’m so glad I found this site. I’ve been thinking about this concept for a year, but never heard anyone else talk about it before. Thanks!

I understand the basic concept, but I’m a bit uncertain about the math regarding balancing the ETFs. Especially when I could not buy them on the same day.

For example:

Let’s say I shorted 100 shares of SRS @ $29. It is now @30 and I’m down -$100.
Finally some URE is available to short, and it is trading at $34. How may shares of URE do I need to short to balance the 2 pairs of ETFs?

Would it be 88?

Thanks!

]]> By: clive collinshttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-6337 clive collins Mon, 05 Jul 2010 05:13:49 +0000 http://www.darwinsfinance.com/?p=1710#comment-6337 Where I said "Possible loss from sustained move in either direction" should have said "from a sustained move up by either fund". Moves down are fine. Clive Where I said “Possible loss from sustained move in either direction” should have said “from a sustained move up by either fund”. Moves down are fine. Clive

]]> By: clive collinshttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-6336 clive collins Sun, 04 Jul 2010 22:55:55 +0000 http://www.darwinsfinance.com/?p=1710#comment-6336 Hi All, How about this? Buy furthest out and deepest ITM put and call on two opposing 3X funds. (This would cost minimum time value loss. Replace when new further outs become available.) Using long calls for stock substitute and long puts to nullify any fund price movement, sell calls three months out and three dollars OTM. (ala covered calls) When one short call falls, say fifty cents, buy back and sell again at three dollars above current fund price and three months out. Gains result from rolling down calls and time decay on both short calls. Possible loss from sustained move in either direction. If advancing fund gets ITM, then, if short call is exercised, long call on that fund would be exercised by broker, stock bought at current price and delivered to short call buyer at his strike price, resulting in a loss. This would have to be managed. Purpose of long calls and puts being three months out and three dollars OTM is provide time and space for volatility to work favorably and also to minimize likelihood of advancing fund getting ITM and being exercised. Clive Hi All, How about this? Buy furthest out and deepest ITM put and call on two opposing 3X funds. (This would cost minimum time value loss. Replace when new further outs become available.) Using long calls for stock substitute and long puts to nullify any fund price movement, sell calls three months out and three dollars OTM. (ala covered calls) When one short call falls, say fifty cents, buy back and sell again at three dollars above current fund price and three months out. Gains result from rolling down calls and time decay on both short calls. Possible loss from sustained move in either direction. If advancing fund gets ITM, then, if short call is exercised, long call on that fund would be exercised by broker, stock bought at current price and delivered to short call buyer at his strike price, resulting in a loss. This would have to be managed. Purpose of long calls and puts being three months out and three dollars OTM is provide time and space for volatility to work favorably and also to minimize likelihood of advancing fund getting ITM and being exercised. Clive

]]> By: BKLhttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-5817 BKL Mon, 17 May 2010 16:46:12 +0000 http://www.darwinsfinance.com/?p=1710#comment-5817 A quick question on rebalancing. How often do you reset your positions to balance one another. Say one position is up 20% and the other is down 5%. Would you rebalance? Thanks for the strategy btw? It is very interesting. BKL A quick question on rebalancing. How often do you reset your positions to balance one another. Say one position is up 20% and the other is down 5%. Would you rebalance? Thanks for the strategy btw? It is very interesting. BKL

]]> By: ETFs on the Move – 5 Top Performers from Last Weekhttp://www.darwinsfinance.com/short-etf-inverse-leveraged-direxion-3x/comment-page-1/#comment-5147 ETFs on the Move – 5 Top Performers from Last Week Mon, 05 Apr 2010 02:18:33 +0000 http://www.darwinsfinance.com/?p=1710#comment-5147 [...] periods of time you’re very likely to actually lose money.  That’s why I’ve been shorting leveraged ETFs on both sides (not EDC specifically) which has actually been quite profitable.  Just keep this in [...] [...] periods of time you’re very likely to actually lose money.  That’s why I’ve been shorting leveraged ETFs on both sides (not EDC specifically) which has actually been quite profitable.  Just keep this in [...]

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