Direxion Daily Junior Gold Miners Index Bear 3X Shares (JDST)

[Qone0]

Mark, be very careful shorting JDST. although its just had a 100% run. In the past its had a 300% run. That will eat your lunch and all your capital. There is no fool proof way to capture the decay through shorting. The decay only happens when GDXJ goes up and down in a sideways manner. In a trend there is not much decay.

Shorting your max profit is 100%. GDXJ spends about 30% of its time trending and 70% in a sideways stair. Trading these stairs is very profitable. This also captures most of the decay. As you are switching from the side with no decay to the side that did decay. There is no time decay. The decay is caused by the daily rebalancing of exposure to the index.

if you are looking for a longer term way to play these. I think owning JNUG and selling covered weekly calls every week is probably the best way.

Weekly calls on the money have about a 6% premium. 6% x 52 weeks is 312% a year. It's not quite that simple because in a down trend the stock is going to fall more that the premium gains. In a uptrend or sideways movement you will capture all the premium. So you would have to rebalance the position every Monday. Never failing to do so.

I would have to compare each weekly JNUG bar over a year to get a close return. But I would think it would easily do 100% return on capital over a year.