The State of Leveraged and Inverse ETFs

As you likely know, many brokerage firms, especially the full service brokerage firms, are no longer allowing their customers to purchase leveraged and inverse ETFs. In hindsight, these firms are correct as these are derivative products no different than options and futures which require approval before being traded. I suspect the same will occur with these ETFs.

In the meantime, the ProShares S&P 500 3x ETF
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has only been trading for only six weeks and last Thursday it traded over $100 million dollars for the day. The demand from the professional traders and the hedge funds is strong for these ETF products and even though the retail investors and many investment advisors should never been allowed in them to begin with, they do provide another vehicle for market participants who correctly view them as a way to grow their money.

As I mentioned above, they’ll eventually require approval ahead of time to trade. But in the meantime, these ETFs do provide ample opportunities for professionals who understand how to trade them. I know many of you are having good success from these ETFs and there should be little concern about them going away soon.

Announcement: I’m conducting a 2 ½ High Probability ETF Trading Seminar this weekend. The cost of the seminar is $8500 and covers directional quantified strategies to trade ETFs, leveraged ETFs, day trading ETFs and trading ETF options. If you’d like to attend a free presentation on the seminar, please click here.

Larry Connors is CEO and Founder of and Connors Research.