RE: HOW TO GO BANKRUPT [3 MINUTE READ]
I've found an interesting strategy in my days on investorshub which involves shorting opposite pairs of leveraged ETF/ ETN's which are a type of derivative kind of like options but these track the price of an asset but gain or lose 2 or 3x the movement in the underlying asset. For example, UGAZ and DGAZ track the movement of natural gas futures contracts by 3x the value of the contract movement on each day. UGAZ goes up when natgas goes up and DGAZ goes down when natgas goes up and vice versa. Over time this results in the ETN's price decaying via losses due to contract rollover and beta decay. I won't go into the details of these as it's kind of complicated (long story)...but if you look at the long term charts, these things always lose value eventually.
Shorting a leveraged ETF / ETN is incredibly risky but if you short a very volatile pair like UGAZ / DGAZ, NUGT / DUST, you can make good returns. I knew a guy who made about 30% profit by shorting equal amounts of the pair and one had decayed by 12% and the other by 30something percent in just several months. The interest paid on borrowing those shares is only about 5% annually so that's a pretty good return
I've never tried this strategy with real money but I have done it paper trading and it work well if you know what you're doing. Some day when I have about 20k to play around with I'm gonna try this strategy for real and not just on paper.