Options or ETFs - which is better for the individual investor?

It is generally agreed that the ProShares long/short and ultra-long/ultra-short ETFs are good vehicles for both hedging and short term trading.

One voice of dissent is from those who are adept at trading options. Their point is that options are cheaper and can provide more leverage. The variety of option strategies (puts, calls, butterflies, straddles, buy/write, LEAPs, etc.) can provide more flexibility. There are also a much larger number of stocks, each with an associated options chain, to choose from while there are only 64 ProShares ETFs, for example, currently on the market.

For the individual investor, though, the ease of use derived from the ETF approach may outweigh the benefits of using options. In the case of the ETF, an investor does not need to choose an expiration date or a strike price.

Now that ProShares has expanded their offerings with ultra-long/ultra-short sector ETFs in addition to the ETFs that track major market averages, investors now have the choice of choosing numerous different types of indexes against which to hedge or speculate. Still, compared to the nearly overwhelming choice of options, ETFs make the selection of the appropriate vehicle much more straightforward.