Hey everyone, Barrie Einarson here with another edition of What Makes This Trade Great. To Subscribe to Trade Ideas: https://go.trade-ideas.com/SHQ
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Today, I want to look at something a little different. Instead of trading Apple directly, this trade focuses on AAPU, a leveraged ETF designed to give traders amplified exposure to Apple’s daily move.

Why Trade an ETF Instead of Apple?

Apple is a fantastic company and one of the most actively traded stocks in the market. But there’s one thing that can make trading the stock itself less attractive to some traders: the price.

With Apple trading around $321, I personally don’t always love trading higher-priced stocks. That’s where some of these newer company-specific ETFs can get interesting.

Over the past year or so, we’ve seen more and more ETFs built around individual companies. The attraction is pretty straightforward: you can get exposure to the stock without having to trade the stock itself, and in the case of AAPU, you get 2x the daily move.

If you believe Apple is going higher, AAPU gives you leveraged upside exposure. And if you believe Apple is going lower, you can use the appropriate leveraged product to potentially amplify that move as well.

The Trade Setup

In this particular trade, I actually shorted AAPU.

I shorted it, and then shorted it again as the setup continued to develop. At that point, the question became: Where does this move start to stall?

One level I was watching closely was VWAP.

VWAP can be a really useful reference point during the trading day, especially when you’re trying to determine whether a move has room to continue or whether it might begin to find resistance.

So, after getting short, I was watching to see whether VWAP would act as a place where the move could stall.

Why I Find These Trades Interesting

This is really what makes these company-specific ETFs interesting to me.

They’re another tool in the toolbox.

Instead of automatically going to the underlying stock, you can look at an ETF that gives you a different way to express your conviction about the direction of the move.

The key is understanding exactly what you’re trading. Leveraged ETFs are designed around daily performance, so they’re not simply a long-term substitute for owning the underlying stock. But for active traders who understand the product and have a specific directional thesis, they can create some interesting opportunities.

In this case, rather than trading Apple directly, I was able to focus on AAPU, use the price action and VWAP as my guide, and look for an opportunity on the short side.

That’s what makes this trade great: it’s not always about trading the stock everyone is watching. Sometimes it’s about finding another instrument that gives you a better way to express your trade idea.

Until next time, keep an eye on the setups, manage your risk, and trade with conviction when the opportunity is there.

— Barrie Einarson