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.
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