VIX is a ticker published by CBOE that tracks near-term volatility. Since August 1, , VIX has crossed the value of 30 five times and has been to the higher 20s more than 20 times.

That means the market has been fairly volatile. Any value above 30 indicates widespread uncertainty and fear. In this article we will explore ideas on how investors can profit from a volatile market. The same thing happens in the stock market.

Fear and uncertainty forces investors to make knee-jerk decisions. There is little or no agreement as to what might happen in the future and that difference in opinion causes stock prices to change directions sharply every other day.

If you have a portfolio that you need to protect, this can be a very stressful time. You might feel like selling your high-beta positions. If you have good dividend-paying ETFs, you want to protect them. You might even find yourself jumping in and out of the market losing not only capital value but also commissions. If you decide to ride it out without making any changes, you could end up watching your portfolio go down in value.

In times of uncertainty there are often short windows of opportunity investors can exploit. When you spot that opportunity, you want to make full use of it without disturbing your long-term portfolio. You can only do that if you react quickly.

The idea is to increase your risk-reward equation without compromising principles of diversification. Here are some ideas that might help:. Anything to do with derivatives is a good option for those who have the time and experience to execute complex trades.

Even with the appropriate knowledge investors need to pay a lot of close attention which takes time to execute good strategies. A margin account is also needed to enter the trades and these charge interest every time you use leverage. Leveraged ETFs, on the other hand, are much simpler to buy and sell. When you have to react quickly, convenience becomes a key factor.

Trading Leveraged ETFs For Max Profits - The Trade Risk

Even if the ETFs execute derivative contracts under the hood, those complexities are not exposed to the investor; it is a simple buy and sell. Additionally, it is much simpler to buy an inverse ETF than short a stock. You can hold the position as long as you want without worrying about giving back the borrowed stock. In the past week, there has been some discussion about oil production cuts.

Production cuts will reduce the oil supply and help increase oil prices. Even though it is speculative at this stage, the news has had a positive impact on the market which is not too hard to predict. Whether or not to use leverage as part of your strategy boils down to your risk appetite.

Leveraged ETFs are very quick and convenient to trade. And by investing in an ETF , you are getting the advantage of diversification as well.

Everywhere you look — from the car you drive to the cereal you eat — branding is everywhere. Every week, we bring you the best and most succinct curation of must-read articles to help you Get the latest ETF news, analysis, and commentary from the independent authority on ETFs. Subscribe to the ETFdb. Low Volatility ETFs invest in securities with low volatility characteristics. These funds tend to have relatively stable share prices, and higher than average yields.

Investors who suspect that the stock market may be about to decline can take action to reduce the Thank you for selecting your broker. Please help us personalize your experience. Your personalized experience is almost ready. Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Check your email and confirm your subscription to complete your personalized experience. Thank you for your submission, we hope you enjoy your experience. Pricing Free Sign Up Login. Leveraged ETFs How to Profit with Leveraged ETFs.

How to Day Trade Using Leveraged ETFs | Investopedia

Tanmoy Roy Oct 14, Here are some ideas that might help: If, however, you are shorting or writing or selling to open option contracts, your potential downside is much larger. Naked call positions expose investors to theoretically unlimited losses. If the option expires then the premium is gone. In case of assets, you still have a residual value if its value declines e.

This strategy provides the advantages of diversification and leverage. It does, however, expose investors to substantial risk. Multi-leg option strategies can allow investors to cut the downside risk and yet take reasonably leveraged positions. For example, if you are bearish you could consider a bear put spread in which you buy in the money puts at a higher strike price and sell out of money puts at a lower strike price.

Just remember that with this strategy both losses and profits are limited. Leveraged ETFs offer the advantages of diversification, leverage, and some net new advantages as compared to derivatives such as lower tax, lower cost and higher convenience.

Image courtesy of Stuart Miles at FreeDigitalPhotos. Get Email Updates Subscribe to receive FREE updates, insights and more, straight to your inbox. News This Week's ETF Launches: Intangible Brand Value in an ETF Aaron Levitt Jun 21, Practice Management 3 Must-Read Pieces for Practice Management: June 20 Edition Kristan Wojnar Jun 20, News Buy on the Dip Prospects: June 19 Edition Sam Bourgi Jun 19, Below is a look at ETFs that currently offer attractive buying opportunities.

Tools ETF Screener ETF Analyzer Mutual Fund to ETF Converter Head-To-Head ETF Comparison ETF Country Exposure Tool ETF Stock Exposure Tool ETF Performance Visualizer ETFdb.

Selling Calls On Triple-Leveraged ETFs: Easy Money? | Seeking Alpha

Explore ETFs ETF Picks of the Month ETF Category Reports Premium Articles Monthly Newsletter Alphabetical Listing of ETFs Best ETFs Browse ETFs by ETFdb. Legal Privacy Policy Terms of Use Follow ETFdb.

Actionable ETF Investment Ideas Analysis of Every New ETF ETF News and Head-to-Head Comparisons. We Respect Your Privacy. Is your portfolio protected for what the markets will bring this fall? Creating a properly diversified portfolio can be a difficult proposition, especially when ETF Investing Low Volatility ETF List Low Volatility ETFs invest in securities with low volatility characteristics.

ETF Investing 10 ETFs for Risk Reduction in Your Portfolio Bob Ciura.