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Shorting them can turn out to be a nightmare. Like if you shorted FAS in early March. It only seems natural that short interest will rise from zero. Current short interests for both ETFs don't seem high relative to average daily volume. Also, the rapid rise in short interests may turn out to be a good contrarian indicator. Would be wise to stay away from shorting these explosive ETFs.

Preet Banerjee

You may have more luck shorting the 2x ETFs as the 3x ETFs sometimes come with a hard-to-borrow fee if you try to short them. I checked into this about two weeks ago and found that FAS and FAZ hard hard to borrow fees of over 20%(!) with Interactive Brokers.

The 2x ETF market is significantly larger than the 3x, which may explain why my broker had no hard to borrow fees on the 2x.

In short (pun totally intended!), the hard to borrow fees (which fluctuate) creates a very high hurdle for positive returns with this strategy.

Steve DiGiacomo

The biggest problem I have is that Etrade and Schwab won't allow shorts on these and many other stocks.



Real World

Um, FAS went up 500% from March lows until early May! Good luck with that short!!

And I would NEVER short FAZ now, never short something that has baselined for TWO MONTHS especially with the market up so much the past two months. Wouldn't surprise me to see FAZ go up 400 to 500% in the next two months.


Etrade doesn't have ability to borrow FAZ or FAS shares. What broker can I short FAS with?

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