On Shorting Leveraged ETFs, Part 2

(In part one, we outlined the mechanics of shorting a leveraged ETF. In this column, we'll look at a specific example and review the results.)

I believe that if you're trying to truly understand the risk-reward scenario of shorting both sides of a leveraged ETF trade, this is the best way to do so: Look at the strategy not only a from long-term perspective, but also considering a worst-case type of scenario. I say "type" because no past worst-case scenario exists, simply because it is the market and anything can happen. So it is possible that a scenario will play out that has never occurred before in the history of trading....1306 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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