Quote:
Originally Posted by trader220
Why buy the ETF? Why not use options on the ETF?
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Options could give more "leverage" -- and potentially higher returns -- but that leverage can work both ways and one can lose more money faster too. (The TBT and PST are double short ETFs, so they are giving leverage already.)
With the volatility as high as it's been, the premiums for options can be quite high -- but that can create good opportunities for those holding the ETFs, or stock, (like Wayne) to write covered calls against the positions and make some good percentage returns.
One could work a complex options position, but for the more average investor, keeping the trades "simpler" is sometimes best.
I like Wayne's short Treasury position (much better than getting long Macy's and GM!); now we just need to get him to buy some gold and silver (and palladium too).