Leveraged ETFs (15 Aug 11)

Leveraged ETFs

A Leveraged ETF offers the investor a simple way to buy a broad index or sector with double or triple the exposure of the underlying index. A Leveraged ETF will allow investors to put a leveraged bet on either side of the market, long or short.  This means that you can buy a 2x or 3x bearish ETF which will increase when the market heads south; these are commonly referred to as inverse leveraged ETFs.  Conversely, you could buy a 2x or 3x bullish fund which will increase when the market moves higher.  These instruments are particularly useful for gaining exposure to the bearish side of the market in a rollover IRA or traditional IRA, where margin and short selling are restricted. 

ProShares Ultra QQQ (QLD) $76.63

Profit Target (15%): $88.15  

Trailing-Stop (ATR x 2): $9.76

ProShares Ultra Dow 30 (DDM) $51.64

Profit Target (15%): $59.40  

Trailing-Stop (ATR x 2): $5.92

ProShares Ultra S&P 500 (SSO) $41.62

Profit Target (15%): $47.90  

Trailing-Stop (ATR x 2): $5.18

ProShares Ultra Basic Materials (UYM) $38.06

Profit Target (15%): $43.80  

Trailing-Stop (ATR x 2): $6.12

ProShares Ultra Oil & Gas (DIG) $42.68

Profit Target (15%): $49.10  

Trailing-Stop (ATR x 2): $6.62

Trading leveraged ETFs comes with a significant amount of risk, especially if the market begins moving against you. This is why advisers recommend using a stop loss order.  A trailing stop  causes a stock to be sold if it falls a particular dollar amount from the most recent high.

All positions displayed are for educational purposes only and are not intended to be recommendations.