O'Reilly logo

Trading Weekly Options + Online Video Course: Pricing Characteristics and Short-Term Trading Strategies by Russell Rhoads

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 19

Leveraged Exchange-Traded Products

The SPDR S&P 500 (SPY) exchange-traded fund (ETF) was introduced in 1993 to much fanfare and some doubt. The question of who was going to invest or trade using the SPY ETF created many doubters. Well, the answer was a lot of people. As of June 2013 the average daily volume for SPY was over 140 million shares and the assets under management for SPY was $130 billion.

Many investment banks witnessed the growth and acceptance of SPY and sought to create funds that would replicate this success. Now there are exchange-traded funds and exchange-traded notes that allow all levels of traders and investors the ability to gain niche market exposure. In 2006 the first exchange-traded funds that sought to leverage performance of a certain market sector or strategy became available to the overall market. Many of these unique exchange-traded products (ETPs) have not gained market acceptance due to complexity or overlapping strategies with existent ETPs. However, there are a handful that are actively traded enough to warrant having short-dated option series available for trading.

Leveraged Long

There are three exchange-traded funds that offer leveraged long exposure to the equity market which have consistently been among the instruments with short-dated option trading available. They are the ProShares Ultra S&P 500 ETF (SSO), Direxion Daily Small Cap Bull 3× Shares ETF (TNA), and Direxion Daily Financial Bull 3× Shares ETF (FAS). Also, the ProShares ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required