13 replies to this topic

[Rogerdodger]

Now even if you want to go long, the ultrashort fund is more liquid (the bid-ask spreads are smaller) so you just short it instead of going long the ultralong ETF. This behavior creates even more liquidity for the short ETF-thus creating a virtuous cycle of steadily rising volume.

That's an interesting observation.
I wonder how many short shares are shorted?


Of course those of us of who trade in IRA's can't short anything, so the SDS and QID are wonderful and QLD and SSO are useful even with larger spreads.

Edited by Rogerdodger, 12 August 2007 - 12:42 AM.

[ogm]

Of course those of us of who trade in IRA's can't short anything, so the SDS and QID are wonderful and QLD and SSO are useful even with larger spreads.

But you really really really want to SHORT stuff in your IRA....
People don't actually want to hold income producing growth securities in their IRA's they want to be SHORT stuff ........

Not just you Roger, I just read other messages on other boards where commited bears, thinking this is THE top are buying this stuff in their IRA's.... thats some invetment

[kaiser soze]

Short interest on Inverse ETFs was not significant atleast as of July 13th, 2007. Security Short Interest Average Daily Volume DXD 240,429 1,914,399 SDS 544,435 5,310,297 QID 523,674 18,552,582

[vitaminm]

Liquidity feeds on itself.

QID started out being more liquid than QLD because the ability to go short is more unique than the ability to go long (you can go long individual stocks, several specialty ETFs, etc).

Now even if you want to go long, the ultrashort fund is more liquid (the bid-ask spreads are smaller) so you just short it instead of going long the ultralong ETF. This behavior creates even more liquidity for the short ETF-thus creating a virtuous cycle of steadily rising volume.

Does your broker allow u to short QID?