August 16, 2006
UltraShort Q’s Come Front and Center
The UltraShort Q’s (QID) were active enough today to get the nod making them front and center on my quote board. For day traders liquidity is everything, and even though there have been a lot of unique and interesting ETFs created in the past year or so, precious few of them are any good as day trading vehicles.
Any intraday setup that I see in the QQQQ now, I would execute using the QID. Combine the 200% from the UltraShort with 4x day trading margin, and you’ve got some pretty good leverage.
Cat: | Time: 10:43 am (utc+8)
August 16th, 2006 at 12:10 pm
Interesting. I’ll have to start tracking how these two correlate. Given the entries you show you would have actually made a little bit more trading the QQQQQ although it would have taken more capital and cost more in commission if you pay per-share.
I was surprised to see that the stop on QID was 37 cents vs. only 9 cents for the QQQQ entry. Given that it’s about 200% of the Qs that 10:15 candle *should* have only been about 18 cents tall. Hmmm…
August 16th, 2006 at 2:22 pm
Michael: I don’t have my charts in front of me, but I’m assuming a stop above/below the recent swing … is it really 9 versus 37 cents? I’ll take a closer look later, and maybe update the post.
August 16th, 2006 at 7:47 pm
yeah, it really was… I just used the height of the 10:15 candles to calculate the stops. I was surprised too and checked it 3 times :-)
August 16th, 2006 at 8:02 pm
Michael: I see how you got the 37 cents versus 9 cents now. When I measure to the swing high/low I get a 56 cent stop (0.78%) in the QID and a 16 cent stop (0.43%) in the QQQQ, which is similar. Maybe eventually the two will move in lockstep … I have to find someone smarter than me who can explain why they don’t already.
August 16th, 2006 at 8:47 pm
Why not just buy the QLD which is double long the QQQQ?
August 16th, 2006 at 9:55 pm
After thinking about it I think this is how it should work. QID is approx. twice the price and twice as volatile. So the moves, in cents, should be about 4x the QQQQ moves or about 2x on a percentage basis. So depending on how you size your positions there may be no advantage to using the “ultra” etfs — I think :-)
August 17th, 2006 at 2:31 am
or why not just buy the QLD AND short the QID…
whoa, trippy.
August 17th, 2006 at 5:57 am
Chairman,
I am a regular reader of your blog and I have learnt a lot from you. Can I ask you a techy question? How do you paste a spread sheet onto your blog? Thanks.
August 17th, 2006 at 7:31 am
Jimmy & Dan: The QLD isn’t nearly as liquid as the QID, so I prefer the QID to the QLD.
zigzag: It’s a screenshot of a spreadsheet, which is about as low-tech as one can get (I’m not very sophisticated on the techy front.)
August 17th, 2006 at 8:22 am
Thanks, Chairman
August 17th, 2006 at 11:43 am
Pardon my ignorance, but what signal (i.e. what logic) persuaded you to go long QQQQ or short QID at 10.15am. I am new to TA and hence cannot catch your rationale here. Thanks for explaining.
August 17th, 2006 at 12:41 pm
B.: It’s a sort of Dummy entry … an inside bar following an impulse move in the direction of the broad market.
November 9th, 2006 at 11:00 am
[…] I first featured the QID as an ETF to Watch back in July and then brought them Front and Center in August. […]
January 12th, 2007 at 4:21 pm
[…] UltraShort Q’s Update UltraShort Q’s Come Front and Center ETF to Watch - UltraShort QQQ (QID) Cat: […]
April 26th, 2007 at 7:53 am
[…] Market was pretty mixed in the morning but the buying kicked in around noon and was strong all afternoon. Looks like every single Short and UltraShort ETF made the new lows list. Young QID has overtaken the QQQQ — I made the point long ago, why trade the Q’s when you can double your leverage in the QID? (The QLD is not particularly liquid if you were wondering.) […]
April 27th, 2007 at 12:23 am
Although the QID is more liquid, since you posted the idea on 8/16/06 the QID is down 30%. Performance is king as noted so many times on your website. Likewise the QLD is up 30% since 8/16/06. Technically the long term chart says to stay with the QLD trade.
April 27th, 2007 at 8:06 am
bigdog: I wasn’t advocating a long-term position short or long in QID … my point is that it has become an excellent thing to trade.