Of course. Any leveraged ETF is only for trading. I am mainly a trader -- of course the difference between trader and investor is really just time.
I've been long BIB since the end of 2012. I use leveraged ETFs as a means of reducing my cash outlays and invest the rest in utilities & REITs. Its a kind of consumer way to execute a carry trade.
Everything is a trade in this economy since it only operates in bubbles. I would say that the last phase of this bull market is about to begin and when it ends in about 12-18 months even the biotechs will get killed.
By the way I used work in PharmaIT for 20 years from 1992-2012. Unfortunately outsourcing and changes in the drug industry (ie: buying biotechs as a means of doing RnD) destroyed that industry.
Interesting there is also the BBP listed on the BioShares website. The problem is they all track each other -- they're all up about 38%-41% this year.
Seems like you still get the most bang from your buck on LABU since it is 3X XBI.
There *should* be liquidity unless there is pandemonium on the street.
I was in SKF (ProShares -2X XLF) during the Bear/Lehman collapses and there was plenty of liquidity until the regulators shut down shorts of the Financials so I was forced to exit but I already made like 75% on that trade.
Forgot to add that there is a 3X IBB -- it just came out a few weeks ago it is UBIO.
3X IBB -- UBIO (ProShares)
3X XBI -- LABU (Direxion)
BIB is the 2X of IBB. If you want the 3X of XBI it is LABU. I sold some of my BIB to buy LABU. I still own BIB as well as LABU.
If you guys want to trade the XBI with 3X leverage you can trade LABU (+3X) or LABD (-3X). Of course that will be very volatile.
The 3X XBI is finally here. LABU just came out yesterday and it is triple leverage of the S&P Biotechnology index.
I will move my BIB holdings to LABU.
Sentiment: Strong Buy
To make my point further on growth vs. value, since the inception of JETS it is up (as of 5/18/15) 3.3% and the average of ALK, JBLU, HA and LUV is up about 6.5%. Again the legacy carriers will always under perform in an up market like it has. HA did drop 33% about 4 months ago on their earnings report but since then it has recovered 90% of the losses ($18.5 -- $25.8).
Even today (5/18/15 1253 EST):
As long as the market in general rises, the growth airlines will outperform even the S&P 500 by a lot unless Oil shoots back over $65-$70 -- that is the only real risk.
Its a pretty good ETF but they should have made it earlier like 2 or 3 years ago. Its too illiquid to trade but good for investing.
The only downside is it is market-cap weighted so it is top heavy on the low growth legacy carriers. It is about 45% in AAL, UAL, LUV & DAL. Of those only LUV can be considered quasi growth. The real growth is in JBLU, AK, HA, VA & SAVE.
I personally think it is better to just own them outright. I've owned all of the top ten except ALGT for a while and I can tell you that AAL, DAL & UAL have done worse than HA, AK & JBLU.