Friday, December 18, 2015

A New Short Position

I added a new position this week, a small short position in $NAIL the Direxion Daily Homebuilders & Suppliers Bull 3X ETF.  That is, a leveraged ETF that seeks to triple the Daily performance of the homebuilders.index.  

I don't have any special insight into the homebuilders, but I think I have a pretty good idea of the long term performance of these specialty leveraged ETFs, which is lousy.  This one has only been in existence for a few months and is already down by 30% or so. 

It's pretty volatile and rarely traded.  The most difficult thing about it is finding somewhere you can short it, and I was lucky enough to find enough for a small short position.  

As always, the key to winning as a short with these funds it to hold the position other an extended period.  Buying and selling in a matter of days doesn't play to it's weakness as a daily rebalanced fund.  

Best of luck trading.