[Ynos]

I am new to etf trading and, have some questions regarding FAZ (3X bear financial etf)

For arguments sake let's consider my analysis on the direction of the overall market is correct.

I think the market is going to drop and therefore was going to purchase FAZ, before doing so I thought the market could go down but many of the banks seem to have gone back to profitability, taking advantage of the volatility.

My question is: Would FAZ/FAS be a good way to trade the overall market using an etf that is leveraged. Could strong fundamentals on banks make FAZ/FAS act inversly? I do not want to trade SPY because I want the leverage of FAZ/FAS, I know there is a 3X S&P etf coming, but it is still in the works.

Please, tell me what you think regarding my question. Thanks in advance for your help.

[wjrusnak]

Originally Posted by Ynos »

I am new to etf trading and, have some questions regarding FAZ (3X bear financial etf)

For arguments sake let's consider my analysis on the direction of the overall market is correct.

I think the market is going to drop and therefore was going to purchase FAZ, before doing so I thought the market could go down but many of the banks seem to have gone back to profitability, taking advantage of the volatility.

My question is: Would FAZ/FAS be a good way to trade the overall market using an etf that is leveraged. Could strong fundamentals on banks make FAZ/FAS act inversly? I do not want to trade SPY because I want the leverage of FAZ/FAS, I know there is a 3X S&P etf coming, but it is still in the works.

Please, tell me what you think regarding my question. Thanks in advance for your help.

Yes... But you're sort of late to the party. FAZ and SKF seem to have had their insane runs. They even had to do a reverse split on FAZ to raise the price, which in turn crashed it further down. I'm not a foreseer, but I don't think people would "freak" as much as they did about banks as they did during the housing crash. I mean, think psychologically... things drastically frighten people the first time... a little less second time .... a third time though?? Look at the peaks on FAZ and SKF to illustrate the less and less fear (smaller peak on second "scare"in Mar) It just doesn't seem logical to short something like financials that has been so beat down and given billions to support itself.

You are seeking leverage... Would increasing your shares really be any different? Unless your scraping the barrel for cash (and would be on margin), I don't think you have any issue with just increasing size.

Can I ask, though, besides the recent rally (and of course "what goes up must come down"), what really makes you think the market is going back to those "scary" levels?