When I traded back in the day there were no leveraged ETF’s.  I wish there were.  They offer the intraday trader opportunity.  Whether ETF’s offer too much risk to the market is not for me to decide. What I know is that there is money to be made as an intraday trader mastering them.  Let me offer one simple example that was our Play of the Day.

I am often baffled by the new trader’s opinion of how a trader makes money.  Often they are brainwashed to believe that you must find the next brilliant trade.  And I suppose at some Hedge Funds or Prop Firms traders do and make a ton of money.  But you don’t have to.  You can trade basic setups that have worked since the inception of the markets and master them.  Plays such as a breaking news play.

And today we saw an excellent breaking news play in FAS.  The housing number was about to be released at 10AM.  Some of our traders watched every tick in FAS and FAZ.  The number hit.  SPY spiked above 102, an important resistance level.  Some of our traders then loaded up in FAS.  FAS made a point upmove and paused.  Then FAS made another point upmove and paused.  Then FAS pulled back before making another point upmove.  This all occurred in about 15 minutes.  And this was an opportunity our desk crushed.

This play takes some guts.  What happens if the move above 102 SPY was fake? It takes some skill.  You must get FAS at a good price so your risk/reward is favorable.  Can you exit quickly if the move is indeed fake?  It takes controlled aggression.  You cannot just pay the offer anytime breaking news hits.  It requires mental preparation.  You must be mentally prepared to hold a large position in a volatile ETF.  But opportunity is abound.

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