Trading Leveraged ETF's - Stocks and ETFs Trading | futures io social day trading
futures io futures trading


Trading Leveraged ETF's
Updated: Views / Replies:808 / 10
Created: by RAM011558 Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Trading Leveraged ETF's

  #1 (permalink)
Trading Apprentice
Davenport Iowa USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: Gold
 
Posts: 9 since Oct 2016
Thanks: 0 given, 1 received

Trading Leveraged ETF's

Good Morning,

I am fairly new to this so please forgive what may be simplistic questions. Here's what I know. In order to avoid settlement delays, one must trade in a margin account. A pattern day trader must have a minimum balance of $25K. Here's what I don't know.

For a 3 X leveraged ETF, do you need to keep a minimum of $75K in a margin account ($25K x leverage)?

I won't be using margin, does this matter?

If the $75k is a requirement, is there a way around this?

I read somewhere that most people trading leveraged ETF's don't trade in a margin account. If this is the case, what other account type would they be using?


Appreciate the help with this.

Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Market Wizard
Germany
 
Futures Experience: Intermediate
Platform: Other
Favorite Futures: ES, YM, 6E
 
Posts: 2,548 since Feb 2013
Thanks: 4,656 given, 6,210 received
Forum Reputation: Legendary


No. SEC PDT rule just states that your day trading account must always show a positive
equity of >= $25k. If your day trading account falls below 25k you can

a) deposit fresh funds to restore the SEC minimum;
b) wait 90 days until you can initiate the first new position.

Concerning your leverage question: Leverage isn't part of the SEC PDT rule.

P.S.: If you are interested in examples and details, see e.g. https://www.interactivebrokers.com/en/index.php?f=marginnew&p=daytrade

Reply With Quote
The following user says Thank You to choke35 for this post:
 
  #4 (permalink)
Trading Apprentice
Davenport Iowa USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: Gold
 
Posts: 9 since Oct 2016
Thanks: 0 given, 1 received

Thank you choke35. Below is an exert from an article in an ETF website. This was apparently enacted in 2009. Sorry, because I am new to this forum, I am unable to give you the link. What are your thoughts? Again, appreciate the help.



Under Rule 2520, such traders using margin accounts were required to put up a daily maintenance requirement of $25,000. With the new FINRA rule, that amount gets multiplied by the same factor of magnification of returns that a particular leveraged ETF uses, according to a notice on the rule FINRA circulated in September 2009.

For example, pattern day traders in margin accounts using ProShares funds that multiply returns by a factor of 2 would have a $50,000 minimum daily maintenance requirement. Such traders favoring Direxion triple-exposure funds would have a $75,000 minimum daily maintenance requirement.

Reply With Quote
 
  #5 (permalink)
Elite Member
Kyoto, Japan
 
Futures Experience: Beginner
Platform: LiveVol
Broker/Data: TD, TW, IB, Saxo
Favorite Futures: UVXY, VXX, VIX, /VX
 
suko's Avatar
 
Posts: 938 since Oct 2013
Thanks: 683 given, 704 received

You could get an offshore account, such as Suretrader, as a workaround.

Being located offshore myself, I trade leveraged ETFs using Saxo via CFD, with no PTD restrictions. Admittedly CFDs are not an ideal arrangement, but they meet my requirements for that limited aspect of the trading.

Reply With Quote
 
  #6 (permalink)
Trading Apprentice
Chicago IL
 
Futures Experience: None
Platform: Custom kNN (CkNN) Algo
Favorite Futures: NUGT, DUST
 
Posts: 7 since Apr 2016
Thanks: 5 given, 1 received


RAM011558 View Post
Thank you choke35. Below is an exert from an article in an ETF website. This was apparently enacted in 2009. Sorry, because I am new to this forum, I am unable to give you the link. What are your thoughts? Again, appreciate the help.



Under Rule 2520, such traders using margin accounts were required to put up a daily maintenance requirement of $25,000. With the new FINRA rule, that amount gets multiplied by the same factor of magnification of returns that a particular leveraged ETF uses, according to a notice on the rule FINRA circulated in September 2009.

For example, pattern day traders in margin accounts using ProShares funds that multiply returns by a factor of 2 would have a $50,000 minimum daily maintenance requirement. Such traders favoring Direxion triple-exposure funds would have a $75,000 minimum daily maintenance requirement.

Rule 2520 is obsolete:

finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3668

I'm not sure if your understanding is correct as I don't use margin for any 3x ETF's

Reply With Quote
The following user says Thank You to userque for this post:
 
  #7 (permalink)
Trading Apprentice
Chicago IL
 
Futures Experience: None
Platform: Custom kNN (CkNN) Algo
Favorite Futures: NUGT, DUST
 
Posts: 7 since Apr 2016
Thanks: 5 given, 1 received


RAM011558 View Post
Good Morning,

I am fairly new to this so please forgive what may be simplistic questions. Here's what I know. In order to avoid settlement delays, one must trade in a margin account. A pattern day trader must have a minimum balance of $25K. Here's what I don't know.

For a 3 X leveraged ETF, do you need to keep a minimum of $75K in a margin account ($25K x leverage)?

I won't be using margin, does this matter?

If the $75k is a requirement, is there a way around this?

I read somewhere that most people trading leveraged ETF's don't trade in a margin account. If this is the case, what other account type would they be using?


Appreciate the help with this.

If you don't use a margin account, the PDT rules don't apply.

T+3 (settlement requirement) only applies to the funds used, not necessarily the whole account.

Reply With Quote
 
  #8 (permalink)
Elite Member
Prince George BC Canada
 
Futures Experience: Advanced
Platform: IBs TWS
Broker/Data: IB
Favorite Futures: Stocks
 
deaddog's Avatar
 
Posts: 591 since May 2013
Thanks: 96 given, 643 received


RAM011558 View Post
Good Morning,



For a 3 X leveraged ETF, do you need to keep a minimum of $75K in a margin account ($25K x leverage)?

I won't be using margin, does this matter?



Appreciate the help with this.

No you only need $25K to day trade. It used to be that you could make 3 day trades in at 5 day period.

You require a margin account to get around the 3 day settlement but you do not have to use margin.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
Reply With Quote
 
  #9 (permalink)
Trading Apprentice
Davenport Iowa USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: Gold
 
Posts: 9 since Oct 2016
Thanks: 0 given, 1 received

Thank you for the information. Very helpful.

Reply With Quote
 
  #10 (permalink)
Trading Apprentice
Chicago IL
 
Futures Experience: None
Platform: Custom kNN (CkNN) Algo
Favorite Futures: NUGT, DUST
 
Posts: 7 since Apr 2016
Thanks: 5 given, 1 received



deaddog View Post
... It used to be that you could make 3 day trades in at 5 day period. ...

AFAIK, you can still make 3 day trades in a 5 day period with less than 25K.

Reply With Quote

Reply



futures io > > > > Trading Leveraged ETF's

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

Alternative Views on Traditional Tools w/Rhonda Jones

Elite only

FuturesTrader71: TBA

Elite only

Al Brooks: TBA

Elite only

Jigsaw Trading: TBA

Oct 19

RandBots: TBA

Oct 24
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
General ETF Trading Question WillMick Stocks and ETFs Trading 1 May 12th, 2016 08:40 AM
Leveraged ETF Re-balancing - the Why and How steve2222 Terms (Glossary) 0 February 14th, 2016 04:29 AM
Day trading leveraged ETF's e4williams Stocks and ETFs Trading 19 July 9th, 2015 01:46 PM
EFFICIENT ETF TRADING PLATFORM? quovadis Stocks and ETFs Trading 2 October 13th, 2012 09:55 AM


All times are GMT -4. The time now is 02:54 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-09-21 in 0.13 seconds with 19 queries on phoenix via your IP 54.225.54.120