15 replies to this topic

[SandStorm]

I think hedging is the main reason why short etfs are traded much more than long etfs. This is not surprising given the market is predominantly long most if not all the time and most of the long expsoure is obtained by owning stocks. My understanding is that most mutual funds are not allowed to short stocks or shorting, period. But if they BUY, say, qid, does that consititute shorting? I mean of course it is a short but can they get away with the technicality by saying I am long something therefore I am not short?? In any case it does make investors easier to get bearish. Either hedging or shorting both are expressing a bearish view.

[traderpaul]

Roger, You gave the best answer but that did not explained why the bear fund went up 10 times the volume while the bull fund went up 3 times the volume....Remember when the CBOE started.....One can only trade the call options?.....Hedging maybe the answer but that will take away money that would have gone to the bull funds....

[SemiBizz]

I just don't think it's useful to try and correlate anything by comparing the two volumes. The signals I have here by looking at them individually tell the story. QLD - tested lows on higher volume. Those get retested. QID - makes the high on greater volume - grounds for retest. Looking at a trigger... we still have not tested the high volume high of 44.48 on the QQQQ itself, I'd be looking for a lower volume test of that high to set a bearish upthrust reversal

Edited by SemiBizz, 23 March 2007 - 09:53 AM.

[Jnavin]

Both QID and QLD were advertised a few times lately on MSNBC and I don't watch MSNBC, I was just changing channels and I saw them. They are known well now among the market timers and gamblers, imho. They are also heavily used as a hedge too...

Counter-intuitive, kis. When they STOP feeling a need to advertise the products, that'll be the time to start thinking about using them as indicators.

Edited by Jnavin, 23 March 2007 - 10:33 AM.

[OEXCHAOS]

More importantly, when you get big moves in the market, these instruments are going to be very active, if only due to the natural arbitrage that can take place if the price gets even a little out of whack in a fast market. Better to watch the shares outstanding, I think. Mark

[arbman]

Counter-intuitive, kis. When they STOP feeling a need to advertise the products, that'll be the time to start thinking about using them as indicators.

I knew you would find a way to fade me