StockFetcher Forums · Filter Exchange · Short DUST & NUGT<< 1 2 >>Post Follow-up
BarTune1
440 posts
msg #139314
Ignore BarTune1
11/15/2017 1:14:31 PM

For anyone interested in shorting leveraged ETF pairs, I just put on the following trade: short 1200 shares of DUST at $26.783 and 1300 shares NUGT at $29.183 ...

We can see how this turns out although it may take some time for the pair to deteriorate in value ... if and when it shows a decent profit ... I'll probably just take the money and run ... would likely just be best to leave the trade on for a longer period however ...

BarTune1
440 posts
msg #139367
Ignore BarTune1
11/16/2017 10:51:13 PM

Well, I am not really expecting to update this trade daily as it should play out over weeks or months .... but it is up +$236.50 so far .... net directional amount at risk is only $201.70 ....

Sym Qty Close Cost Chg Cost Mkt Val Gain/Loss

DUST -1300 $26.73 $26.783 -$0.05 -$34,749.00 -$34,817.90 +$68.90

NUGT -1200 $29.02 $29.183 -$0.16 -$34,824.00 -$35,019.60 +$195.60

-$69,573.00 -$69,837.50 +$264.50


BarTune1
440 posts
msg #139730
Ignore BarTune1
12/1/2017 5:03:27 PM

Well, it is a slow decay - kind of like watching paint dry - however currently up now $540.50. Net directional risk $1,137.

Sym Qty Close Cost Chg Cost Mkt Val Gain/Loss

DUST -1300 $27.09 $26.783 +$0.31 [1.15%] -$35,217.00 -$34,817.90 -$399.10
NUGT -1200 $28.40 $29.183 -$0.78 [-2.68%] -$34,080.00 -$35,019.60 +$939.60

-$69,297.00 -$69,837.50 +$540.50 +0.77%


mahkoh
1,059 posts
msg #139740
Ignore mahkoh
modified
12/2/2017 2:23:41 PM

Could you check what you paid in cost to borrow so far?

BarTune1
440 posts
msg #139746
Ignore BarTune1
12/3/2017 11:29:07 AM

mahkoh,

i'm using TD in Canada and there are no borrow costs here ... if they were being charged, it would clearly impact the gain/loss ... if your account is subject to borrow costs ... you could still enter the trades synthetically using short deep in the money call options without having to incur borrow costs ... in fact, depending how long you went out, you might also capture some option time premium which would also decay in your favor ...

risjr
162 posts
msg #140002
Ignore risjr
12/11/2017 7:22:10 PM

Great call!! 3x silver or gold...did real well!

risjr
162 posts
msg #140003
Ignore risjr
12/11/2017 7:23:37 PM

that is jdst...dslv

WantingLittle
11 posts
msg #140046
Ignore WantingLittle
12/12/2017 9:29:32 PM

Bar, sorry for the novice question but what is "net directional risk"?

BarTune1
440 posts
msg #140067
Ignore BarTune1
12/13/2017 3:24:56 PM

because you are short both the 3x long and 3x short, you have no directional risk to the extent that the market value of the positions is equal ... to the extent that one position is larger than the other you are left "unhedged". Consequently, the positions can run against you if you get an extended move in any one direction ...

this past week or so I was underwater for a while because NUGT kept dropping and DUST kept rising ... I was short around $30K of NUGT and short $40K of DUST .... thus $10K of directional risk ...

A 10% move in the ETFs if NUGT went down would net me $3K but would cost $4K on the DUST short ...

However, today has been a good day so far ... it went the other way and I'm up around $4K on DUST dropping in value whereas the other side .... a 10% increase in NUGT has cost only $3K ....

I will update the results sometime this week

BarTune1
440 posts
msg #140146
Ignore BarTune1
modified
12/16/2017 9:52:24 AM

Symbol Position Close Cost Net Change $ / % Pos Value Cost Net Gain/Loss %Change

NUGT -1200 $26.57 $29.183 -$2.61 [-8.95%] -$31,884.00 -$35,019.60 +$3,135.60 [+8.95%]
DUST -1300 $28.66 $26.783 +$1.88 [7.01%] -$37,258.00 -$34,817.90 -$2,440.10 [-7.01%]
-$69,142.00 -$69,837.50 +$695.50 +1.00%

Current position +$696.50 .... net directional amount at risk is $5,374

This is a pretty decent return over the last 30 days. I would argue that ROI should be measured as a function of the amount directionally at risk rather than the total position size given that the short positions completely offset. The only amount really at risk is the extent to which you may be over-positioned on either position due to market fluctuation.


StockFetcher Forums · Filter Exchange · Short DUST & NUGT<< 1 2 >>Post Follow-up

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