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Trading system for short inefficient ETFs – 3rd part – length of the trade

19 Apr 2018

In the previous article, we have explained that the VIX index is one of the most important entry parameter when it comes to our system for shorting volatile ETFs. Today, we will focus on specifying why it is so and how important for the success of the strategy is the length of the trade (that […]

Trading system for shorting inefficient ETFs – 2nd part – Entry Signals

12 Apr 2018

In the last part of the series, we set out a basic overview of components that are needed for creating a trading system for shorting inefficient ETFs. In today’s work, I would like to focus on entry situations suitable for opening the trade.     There can be of course many entry signals for short. […]

Trading System for Shorting inefficient ETFs – Part 1 – Basic Overview

5 Apr 2018

In today’s part of our educative series, I would like to focus on how to start building your own specific trading system for shorting inefficient ETFs. Above all, I would like to focus on the basic blocks of such a system, which I will then discuss in detail in later chapters.   Market selection First […]

Alternative Approaches to short inefficient ETFs – Pair Trading (3/3)

29 Mar 2018

In the previous two articles I described how to use pair trading – in our case double short – to benefit from inefficient ETF. We said that when selecting suitable candidates, it is necessary to take into account the borrowing fee (in % per year) for short, the volatility of these markets and, last but […]

Alternative approaches to shorting inefficient ETFs – pair trading (2/3)

22 Mar 2018

In the last part of our series, we explained that pair trading of inefficient ETFs – more precisely the shorting of both ETFs in a given pair – may be considered as an interesting way to benefit from their inefficiency. But we have also said that in order to be able to think about trading […]

Alternative approaches to short inefficient ETF – pair trading (1/3)

15 Mar 2018

Dear readers, in today’s article I want to introduce you to a slightly different approach of trading ETF inefficiencies. So, let’s take a short break from the option constructions. First, I would like to follow p with the article in which I have described a very basic approach – direct ETF short. However, as I […]

Option Strategies for Shorting Inefficient ETFs – Summary

8 Mar 2018

In this article, I would like to make small summary and comparison of the option strategies discussed so far, and that can be used to short – speculate on the decline (not only) of the inefficient ETFs. I would like to mention their advantages, disadvantages and compare the situations when they can be used.   […]

Ineffective ETFs and Option Vertical Spreads (2/2)

1 Mar 2018

In the previous article on vertical spreads, we have discussed the bear call spread strategy. We explained why it represents a very interesting opportunity to speculate on the decline of the underlying market, with a clear risk-profit ratio. The same can be said about the strategy that will be the subject of today’s article, and […]

How to earn on a black swan?

15 Feb 2018

Dear readers, let me come back to the interesting events of the past week, which literally brought a storm to calm waters of the financial markets and brought an unexpectedly high volatility to the financial world. To events that are to a certain extent extreme and respectful with regard to the speed at which they […]

Reverse split and options

25 Jan 2018

In the last part I have described the basic principles of short-call strategy trading in connection with inefficient ETFs. I have noted that in a situation where the price of the ETF reaches a low level, there might appear a so-called reverse split (the conditions under which it occurs, are usually described in the fund´s […]