Do you remember DIG DUG, the famous arcade game released in 1982 by Namco?  The object of the game is to eliminate underground-dwelling monsters, either by inflating them until they pop, or by digging up and dropping rocks on them.  Perhaps the managers of proshares were fans of the game, or perhaps they just ran out of interesting letter combinations, because DIG and DUG are more then just the components of the 1982 game.


In the land of proshares, leveraged ETF’s, DIG is the ETF to  attempts to match twice the performance of the Oil and Gas sector.   And DUG is the opposite, attempting to match twice the INVERSE performance of the Oil and Gas sector.  Both have been around for quite some time, but with the recent volatility in the energy sector, they are both seeing increasing trading interest.  And the good news for options traders is that both of these ETF’s are optionable.  They usually have high implied volatilities which are great for selling calls against.

Similar to the proshares DIG and DUG, Rydex Funds also offers double exposure ETF’s.  Their energy ETF’s are REA, which is exposed to twice the upside performance of the S&P Select Energy sector, and REC, which is exposed to twice the inverse performance of the S&P Select Energy sector.