Leveraged ETF

ProShares offers two leveraged silver etf products, one a double (2x) long and the other a double (2x) short silver product. Since their introduction in late 2008 both ETFs have become extremely popular with traders.

Double Long Silver ETF – AGQ

Despite the fact that AGQ (Double Long Silver) trades at $220 per share it’s still trading in excess of a million shares per day. AGQ was the #1 performing ETF in 2010 and after a correction in January 2011 is back on track for another strong performance. AGQ carries an annual expense ratio of .95% (95 basis points) which is normal for the ProShares leveraged ETF series. Since AGQ began trading near the lows in Silver you can see it has had exemplary performance even when compared to the largest silver etf – SLV. As you can see the long term performance has been more than double the movement of cash silver prices which is EXTREMELY rare for a Leveraged ETF of any kind.

Double Short Silver ETF – ZSL

On the other side of the coin is the leveraged double short silver etf which trades under the ticker symbol ZSL. This etf is also extremely popular considering it has been absolutely pummeled during almost it’s entire existence. It has been reverse split a few times which explains the starting price of $1200 on the chart below. Despite an absolute miserable performance over it’s lifetime it still has an average trading volume of well over a million shares per day. There are no lack of traders wanting to catch the downside in silver whenever it may occur.

Like it’s counterpart ZSL also carries a .95% (95 basis point) annual expense ratio. Since it’s inception precious metals have been in a persistent bull market, so to say it’s been poor is a definite understatement. In fact, if you use the numbers on the chart below $10,000 invested on the first day of trading would now be worth about $216. OUCH!

As with all commodity markets, this ETF will have it’s day in the sun but there is probably a bit more pain to endure before it arrives.