Registered User
Joined: 10/7/2004
Posts: 319
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If any of you are thinking about shorting the market, have you tried using the short ProShare ETFs? Ex) DXD,MYY,MZZ,etc.
I bought some of these ETF's on Feb 28 and may add more to them depending on how the market continues to play out over the next few weeks.
Since these are ETFs, I can buy and sell them anytime throughout the day, unlike mutual finds. Also, I don't have to short individual stocks or buy put options.
The short funds seem to correlate to the underlying market at a 1:1 ratio, the ultra short funds at a 2:1 ratio. In, other words, if the S&P declines 1%, the short fund rises 1% and the ultrashort fund rises 2%.
Do any of you gurus have any real experience trading these funds? If so, what are your likes and dislikes about them?
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Thanks RWPOD for bringing attention to these trading vehicles. When I want to short big size I've always gone with QQQQ ETF...but usually don't do worth a flip. I got stopped out of QQQQ couple days ago and have sour taste about it now (head game), so now I've added more shorts to individual stocks. But I get your point and I'm definitely pulling up charts of the ones you justs metnioned, thanks again.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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I love them for many reasons. I have bee waiting for a good entry. Sadly I expected a market step back a few months ago and had a GTC breakout order floating over all of them. Then markets began to climb and inch their way higher and I began to think maybee we werent going to see a correction so Icancelled the orders and the NEXT day was the huge market drop. That is life. I'm waiting for a better entry right now... Played the bounce and played the whipsaw tdays ago... now looking for the next leg down to start.
they are great though becasue there is no short interest, and for those with out margin it is possible to to take advantage of a falling market.
Check out the bop they were getting before the sudden drop... also check out the red bop QID got yesterday.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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I just scanned and looked at QID and the ones above, I see the allure but not sure yet of advantages of one over the other...if I were to play this group I'd like to stick to one. One thing I like is that most are more volatile than QQQQ, i.e. QQQQ down .38% as I type, while QID for example up .86%.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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That is the "magnified inverse movement". if you do a search on proshares from bigchartts news there is a little video about them and a brief interview with a proshares manager.
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 Gold Customer
Joined: 11/11/2006
Posts: 359
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Scottnlena: Yeah, I know the feeling. I ran across these things in November or somewhere in there and made a watchlist and just looked at them every once in a while. I dabbled; in-out-in, etc. but nothing much. Biding my time. I got in just at the big drop on Black Tuesday and was shaken out in the dead cat a week later. In reviewing MZZ for the midcap 400, it gave a beautiful reversal signal days prior to the grand decline. On both the 22th and 23rd there was an inverted hammer candlestick (one of the best) followed by a nice bullish engulfing on the 26th. The day prior to the fall. I did not trust it at the time, but they don't lie to often. I am in DXD,Mzz,SDS and QID at the present. Liquidated everything long when the Stuff hit the Thing on 27th Feb except DSTI. It went yesterday.
Good trading
Mammon
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Registered User
Joined: 12/2/2004
Posts: 1,775
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inverse movement, okay, thanks. Well, I've got QID on my screen now and seriously thinking of grabbing a small bite later on, possibly adding another small piece even later. Right now my account is roughly 70% cash, 20% short, 10% long. If I add some QID long (to play short side), I probably won't let my short side bet get over about 30-35% which is heavy for my taste. I simply have never felt comfortable in market pullbacks being very heavy on the short side. I still fill antsy about which way market is going from here, so I'm gonna hold off adding anything significant long or short until maybe later in day if things become clearer.
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Registered User
Joined: 12/19/2004
Posts: 457
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Anyone notice that there are rather large transaction costs associated with some of these inverse funds?
I wanted to place a market order on QID a few weeks ago, and the spread amounted to around 10%. For an investment of 2500, you would end up with 2350 worth of shares.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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I'm 100% cash right now...I never had the greatest luck trying to play both sides at the same time. I expected to enter som stuff today but so far alls prety much quiet on the eastern front. I think monday will will be pretty important.
Yes shorting is inherently more risk...becasue if for no other reason the main trend is still up... so it would be countertrend trading to some.... Also corrections dont tend to last as long as market runs.. in general so most people are not as practiced at shorting and finaly but not least there are all the bottom hunters that can be good at making stocks bounce unexpectedly. you are probably wise to hold off for a bit. allot of my favorites for shorting aren't at great entry points, which gives me caution but there does seem to be some serious downside pressure onthe market in general. Probably should spend this weekend revamping my short list candidates.
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Registered User
Joined: 4/18/2005
Posts: 4,090
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CAL and GME have my eye as well as CHINA for shorts. I have some other higher risk ones that might get drug down in a broad market correction but their indicators look healthy for the longer term.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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QUOTE (rmr1976) Anyone notice that there are rather large transaction costs associated with some of these inverse funds?
I wanted to place a market order on QID a few weeks ago, and the spread amounted to around 10%. For an investment of 2500, you would end up with 2350 worth of shares.
I don't understand the 10% spread on QID. Do you mean spread between bid and ask? Looking at screen now and that spread is consistently one penny. A limit order should fill quickly at the ask I would think. Or am I missing something? Thanks.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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QUOTE (scottnlena) I'm 100% cash right now...I never had the greatest luck trying to play both sides at the same time.
Agree, racks the brain too much trying to play both sides at once. That's why I'm liking this QID more and more; having just one bear side playing going alongside several longs would be easier to keep up with and certainly has its merits. Thanks for bringing it to me attention.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Thanks guys again for chatting up ProShares ETFs, especially those "inverse squared" I believe they're called. Seems like they are getting hype all over the place now. I've been studying on them more and understand them much better. A lady was on CNBC late yesterday I think promoting them. I don't think I'll short the QQQQ any more, instead going long QID (as some of you suggested). It's the inverse square to QQQQ I believe, twice price movement percentage. As for going long QQQQ, why not the QID sister in opposite direction, QLD? Nice alternatives, but of course twice as volatile so have to be careful, but then not THAT volatile. If one wanted he/she could play the QQQQ on full margin via QID or QLD as a proxy, without going on margin at all if you get my drift:) Did that make sense?
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Well, just stuck toe in water with a small bite of QID at 54.65, market weakening, will add if price closes above current day's high.
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Registered User
Joined: 10/16/2004
Posts: 8
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in regards to Proshares; I've been using them for a while now.
I use the QIDs they have the best liquidity intraday, I've done the QIDs several times a day some days.
Messed around with DXD,SDS but didn't have very good luck just not enough volume and could only do about 200 shares not really worth it.
DIG and DUG look like they could be pretty nice depending on which way you want to go with oil.
As far as the spread in the QIDs I find at the open they pump them up until they get some type of feeling for movement.
Then once we hit or rally up you'll see the spread reduces then around lunch time it'll widen or if something is up it'll widen.
during the big sell-off thy were pretty fluid except my quotes were late,Using schwabs pro-street.
the other thing I find is in a good move trying to really click and hit the ask or bid is next to impossible sometimes I 'll just put my bid or ask out about a nuickel off and it'll get filled.
so far the most i can fill without a real pain is about 1000 at a time.
most prints I see are 100-300.
The idea is slick I like the inverse 2-1 not that hard to get .50 moves sometimes other times good luck.
also a couple of weeks the AMEX has a a problem and these weren't trading for a bit so that could also add another level of anxiety to trading tem.
all in all not bad.
I have done the QLD but get real touchy with that one not much volume and it drop like a rock even if the QQQQ's really aren't moving.
must be that new math of 2-1 hustle everyone 24/7 good luck if you jump in
The QIDs so far are leaders in volume for proshares that I see.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Wow slingerland, really interesting and great read on your experiences and tips for QID and others, thanks. One thing I don't like is that QID doesn't seem to trade at all pre market...I rarely trade pre market but there are times when I'd like to have the option. Cheers.
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