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Protecting Profits With Reverse ETFs (DXD, SDS, QID, DPK, TYP, TZA)

by Jason Smith | September 14th  |  Filed in: ETF News

Stocks have staged a solid rebound in September, and the Dow is on pace to close its ninth positive session in the last ten trading days. While there are still plenty of attractive valuations, and M&A has stayed strong, traders can protect their recent gains from a short-term pullback by utilizing one of the many “reverse ETFs,” which are designed to track the inverse of a particular equity sector or benchmark.

The Leveraged ETFs Index is composed of exchange-traded ways to make leveraged bets on or against the market. For hedging purposes, adding stakes in the Ultrashort Dow30 Proshares (DXD), Ultrashort S&P500 Proshares (SDS), or Ultrashort QQQ Proshares (QID) can pare net long market exposure without rebalancing an existing portfolio and racking up trade commissions.

Experienced short-term traders can use 3x leveraged ETFs like the Developed Markets Bear 3X Shares (DPK), Technology Bear 3X Shares (TYP), or Direxion Shares ETF Trust Small Cap Bear 3x (TZA) to get big “short” exposure without tying up too much capital. Of course, the higher the leverage, the more dangerous volatility can become. As such, the securities are recommended for day trading purposes only.

Investors can track the Leveraged ETFs Index for more ways to protect recent gains or make leveraged bets on a continued market rebound at tickerspy.com.

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