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Took profit and off to bed for a bit. ;)
GLTA
Yes, I did... and, those puts are looking nice this morning. ;)
In Reply to 'Porgie Tirebiter'
I hope you decided to hold!
LOL, I offer no advice on that one. Who knows what will happen before the open tomorrow?
Personally, if I found myself a winner, I'd keep the money. FAS and FAZ options are all pretty low delta with high theta.
But that's just an observation. Again, I'm offering no advice.
Agree, but i see fas turning further down days end. Zero fundamentals for investors to hold banks over the next few days.Chart is breaking down. I really don,t think europe want,s are fed telling them what to do. like you said cool heads are in cash, but if you like to gamble today is the day! Red, but put one in the basket. LOL
Although there are no direct European securities in FAS, we could see a turn higher when Europe closes.
If you want to gamble, look at the SEP 13 call. If FAS does turn, it will trade with a .9 delta this afternoon, and probably less than a nickel bid-ask spread. It's a great way to leverage a couple hundred bucks for a quick trade. But it is a gamble. At least you have a 50/50 chance with it. And you can take a loss while preserving most of your capital. Better than the abysmal odds and low delta you get with OTM options.
If the turn is decisive, I may go there. If FAS doesn't turn, or just muddles around, I'm staying out.
markets not buying in to euro tarp, what a joke! Our tax dollars belong in the usa, not bailing out the EU
It's quadruple witching day today.
FAS/FAZ are a straight up guess, and with high volatility, there are no good hedges to be built.
I'm continuing to stay on the side.
http://www.moneycontrol.com/news/international-markets/quadruple-witching-europe-officials-make-volatile-market_586859.html
Funstick, i have done well myself over the last 2 days with Fas, but what is driving the markets? looks to me to be a lot of hot air. Nothing has changed, could see a sell off going into the weekend.Caution is the word of the day
Does the market have some legs? I made two nice trade with FAS today.
I know Morgan Stanley is a big part of FAS/FAZ, and so is BAC. Today's performance in those two alone is probably a big factor today.
I don't follow MS directly, but it looks like short positions in that stock might be covering today. But they're certainly not getting squeezed, they'd be booking profits.
refering to banks in general, not ETF
No. I don't think that's possible with an ETF constructed like FAS and FAZ. Besides, a 6% move is not unusual in FAS/FAZ land anyway.
Look at the underlying index and it's relation to the 50 and 200 day moving averages. I don't put much faith in technicals, but sometimes it becomes obvious when a market has moved out of whack.
http://stockcharts.com/h-sc/ui?s=$rifin
she,s bustin out! is a short squeeze in play Porgie Tirebiter?
doing pretty good with fas today a bit of a nail bitter. seems the shorts are pulling out all stops to keep banks down, but the intra day is still holding for now
You bought long O.T.M. front month puts? No hedge? No capital protection??
To me that's just straight up gambling. With very poor odds besides. You need FAS south of 12.60 before you can even begin to profit. And you only have two sessions to do it. FAS above $13.00 and you lose it all.
You would be much better off just betting red on the roulette wheel. At least the odds are around 47% on that bet.
In summary: Europe's economic fate depends on our ability to buy new Mercedes-Benz's. Keep trading!
Get ready, Obamas job plan looks DOA
France says they will back up Greece
Greese says they don,t need money,
But we will take the hand out and promise to pay in the future.
Germany is really the only savior, but why should they back up the EU, when they are the only ones with a positive GDP?
faz After market 58.09
Same here. Plus two french banks got thumbs down today. People are probably desparate for a bottom to buy and jump in after every bad news. The problem now is that more bad news always comes out. lol
looks like a dead cat bounce IMO< nothing has changed, except france will do all it can to bail out Greece, last i looked france holds more greeasy debt than any body! LOL>
I'm surprised at the run today. The news wasn't THAT great IMO. VXX did pull back pretty hard today though.
Bought faz 20 minn before close,(57.01) will see if the aftermarket shows a few gains 58.01 current, will sell before 8pm if gains continue (200 shares)
Actually I did grab just a handfull of FAS 13.00 puts that expire this week RIGHT at the close, 3:55pm to be exact. It's risky, but my guess is that there will be profit-taking and/or bad news tomorrow or Friday. I only got a few in case it gets bullish for some reason. I feel like $SPX hit resistance today anyhow. Thoughts?
Shankapotamus, did you buy a put this afternoon?
any body have trouble with scottrade elite had to call to sell got out at 13.35
I'd never be crazy enough to short those things! lol... No problem there!
Sorry, I thought you said you were buying out of the money calls and puts in FAS. By "long" I wasn't referring to time.
I mean't long as in buying them, as opposed to selling them which would be short.
Only a fool would go long with FAS/FAZ or any of the other 3x ETFs. VXX puts will be fun, but who knows when those will be good. Time decay is harsh with VXX.
You were making money off the pop in volatility. That strategy will be a sure loser when the VIX index starts falling.
Long out of the money options in both FAS and FAZ will be losers even if the underlying moves your way. Volatility crush is particularly brutal with these two ETFs. Beware.
Just buy a few options on the pops/dips. I hold them overnight all the time for nice returns. You have to be patient to make an entry though. If one of the 3x ETFs runs up like 8%, buy puts just out of the money and sell them the next day. Four out of five times it works for me. I've been playing puts/calls on FAS alone doing just that. Just an idea.
loose your shirt, held 1k shares overnite last nite and almost lost my shirt. note to self, NEVER HOLD FAZ/FAS OVERNITE!!
Hold overnight and see what an ETF is capable of.......
Walker200 are you going to hold overnight? fas posting 14.05 after hours.I,m holding a position since the am. need to watch the futures market in europe might hold a small position overnite, but it goes against my grain.
This article is almost an advertisment for this "Portfolio Armor" application but it does talk about hedging these kind of high risk ETFs. It even mentions FAS and FAZ and how they are currently too expensive to hedge.
http://seekingalpha.com/article/289486-the-most-active-etfs-and-their-hedging-costs
Hedging is magic and you have to do it for all the stocks you own. I was actually cheering while stocks I owned cratered last month because I was able to buy more shares with the cash I collected on the way down.
A lot of people dismiss hedging because they say it caps your profits which is true to an extent, but more importantly if you do it right it, because of the delta shift, it limits your losses much more than it caps profits.
But you can't really hedge FAS/FAZ effectively right now because implied volatility is too high. I'll give you an example.
Let's say I have $1,470.00 to play with today and FAS is at $13. I'll buy 100 shares of FAS this morning for a total of $1,300 and hedge with one SEP 14 put for $1.70 ($170.00). I choose that put because it is the closest to neutral delta.
Using current delta and gamma and assuming a $1 move will maintain volatility and a $2 move will increase it, I can expect the following:
FAS goes up $2 my investment will be worth a little more than $1,581.00
FAS goes up $1 my investment will be worth $1,517.00
FAS with no change my investment will be worth less than $1,470
FAS goes down $1 my investment will be worth $1,437.00
FAS goes down $2 my investment will be worth a little more than $1,415.00
Can you see how the hedge is working a little bit because it's letting me make more if I'm right than what I would lose if I'm wrong?
So although it works, this hedge isn't really feasible because it's capping my profits without providing very much downside protection. And it's gauranteed to lose if FAS does not move very much. So there are two ways to lose, and only one way to win. Can't go there. So although it's a little bit effective, it's not effective enough to actually use because of the current implied volatility.
Porgie, how have you been hedging FAS/FAZ? i've traded them a few times and looking to again.
Yes Porgie I think you are right.I would like to stay overnight
with the ETF;s but its too dangerous.I would right now rather take
a big bet on FAZ.Here in Europe things look more and more ugly
for each days passing.The European markets were up big this day.
But its on low volume and really only a bounce from the absolute recent bottom lows.The EU could fix Greece,Portugal and Ireland for the moment,but in the end these countries WILL default.But Italy
and Spain are coming in next....The entire European banking system will crash and collapse during the next 6-12 months
I am out of all stocks except for a medical company.
I've been playing FAS/FAZ since shortly after they were introduced. I learned early on to always hedge. So I tend to stay on the side lines during markets like we saw in August, and are still in. The cost of the hedge just becomes too expensive.
I think it's a big mistake to enter these based on what you think is a macro economic trend. Play them on based on today's market. Tomorrow play them based on tomorrows market.
Anyone trade TNA/TZA? Often has even higher volatility than FAS/FAZ. Financials have been lagging lately, but finally decided to commit to this rally on Monday with 11.8%. TNA 14.3%+ on Monday.
Hello rocco.Agree with your statements.I have traded FAS and FAZ
for years.I have learned one important RULE.Only trade these
instruments when there is a clear direction.Up or down.Dont trade
them when there is no clear catalyst or happening that inevitably
take you to the land of profits.Just a good advice that I am pretty sure you already knows of.Greetings from Europe.
wash, rinse, repeat. Welcome to Fas/Faz this is a day traders paradise !!
And so is the wagon rolling again.Its the same story as the last round.Stockmarkets all over the world will continue to go up.
But oil will move up as well since the statitics coming in now is
positive.there will come bad news mixed with good news.But the good news will be better than the bad news.Hang on until the oliprice hits 110-115 /boe.Thats the tipping point when peoples
wallets get empty.And then its time to sell.The same old story
Like I said earlier, I think 750 on the RIFIN index is real doable in the very near term. The index was very oversold.
It will probably be back to the high 800 or 900 range in the not too distant future, but expect pull backs along the way to it.
PT we hold this level threw the close, 16.50 is not to far fetched. we could see this in the am, barring we are not attacted by locust in the aftermarket hours LOL
looks like the banks are on the move, traders starting to see they are way over sold
That would require a move to around 750 on the underlying index. And that's probably not out of the question at all.
http://stockcharts.com/h-sc/ui?s=$rifin
Looking for some upward movment in the next few days, have a target of 16.5 by thursday
I never pictured you as a bull...... pinch me. I also like to hammer the VXX when we get asian drops....
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Welcome
The key word to remember here is DAILY.
FAS/FAZ are not intended as an investment, but as a trading tool designed to reflect the DAILY moves of the Russell 1000 Financial_Services Index X3.
Historic Develpments for FAS from Direxion
Forward Split for 5 Direxion Bull ETFs
FAS included in Dividend Distribution
Each day Direxion publishes the current makeup of this ETF: http://www.direxionshares.com/holdings_fas.csv
Link To Direxion's FAS fact sheet: www.direxionshares.com/pdfs/Financials_Bull-Bear_Fact_Sheet.pdf
Link to fact sheet regarding Russell 1000 Financial_Services Index: www.russell.com/indexes/PDF/fact_sheets/US/1000Financialservices.pdf
Link to Prospectus: direxionshares.onlineprospectus.net/direxionshares/FAS/index.html
Link to Summary Prospectus: direxionshares.onlineprospectus.net/direxionshares/FAS/index.html
Link to Russell 1000 Financial Index (RIFIN) chart
Link to Dow Jones US Financials
It is important to understand the unique characteristics of leveraged ETFs, and in particular Triple Leveraged ETFs.
While these funds are designed to reflect a daily 3X change in the underlying assets, It is important to understand that over an extended period of time a leveraged fund may actually UNDERPERFORM the underlying assets represented!
Important Reading:
www.direxionshares.com/pdfs/DS_Paper_011210.pdf
www.finra.org/Investors/ProtectYourself/InvestorAlerts/MutualFunds/P119778
Good video:
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