I have heard of this strategy being used when holding leveraged 2x or 3x ETF's over a longer time period, like 4-6 weeks or longer when decay is more impactful. I have never applied this strategy myself.
I typically do not hold a leveraged ETF for more than 10 days to two weeks, a time period where the decay is not as impactful.
I believe DUMA has talked about this strategy a time or two on his board. GLTY
You absolutely don't want to short TNA if you want to be short, go long TZA. There is an effect that goes by many names, such as creep, decay, etc. Me expericence tells me holding a 3x in the direction the funds were intended and there is a gain, I can expect an increase in gain in a 3x fund vs holding the same in a 1x fund. I have seen this over and over.
The issue is chop. Imagine prices being in channel moving up and down 15% over and over. So if a $1000 investment dropped -15% to 850, then gained 15%, the balance would only be $977.50. $22.50 was lost on the cycle.
For an equivalent investment of $3000 in a 1x fund moving in a 5% channel, the fund would drop to $2850 and move back to 2992.5. The lost would only be $7.5.
But as the up cycles become larger than the down cycles, the 3x funds start to shine.
Here the data for SPY, SPXL and SPXS for Dec. Since the month was a down month, the SPXS was the best fund to invest in and save 2/3 of your capital to boot.
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