Expecting downturn in S&P 500 – how profit from it?

By Tatabear, April 25, 2012

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Hello All,

I am expecting a significant downturn in the equity markets. I would like to profit from this. Can anyone suggest a fund or some other instrument that is designed to go up as the S&P 500 goes down?
I am aware of one such fund: RYURX (recommended by one fo the Money Morning guys.
THanks much. Bill Gehl (Bucharest Romania)

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7 Comments on " Expecting downturn in S&P 500 – how profit from it?"

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GFish
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GFish
April 25, 2012 12:15 pm

SPXU – it’s an ETF that is leveraged at 3x the inverse of the S&P 500. If S&P 500 goes down 1% for the day, SPXU goes up 3% for the day.
SH is 1 for 1 inverse of S&P 500. Note these are highly risky.

Justin
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Justin
April 25, 2012 12:40 pm

SDS
DXD

CaveBear
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CaveBear
April 27, 2012 4:13 am

Well, you could always buy puts on SPY. The June quarterlies are cheap, if that fits your timeframe, although I’ve been expecting that particular correction for a while now, and the June quarterlies weren’t nearly as cheap when I got them, so maybe you want more time to work with.:)

You can use them as the base of a recurring spread, if you don’t get your expected results soon–sell, for example, OTM weeklies against them.

Not advice, of course, just thoughts.

Bill Gehl
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Bill Gehl
May 8, 2012 4:58 am

THanks Cavebear for your suggestions. I’ll have to bone up some before I completely understand the suggestions – even the vocabulary. You are clearly much more sophisticated than I in investing know-how.

Mrs. Ratfire
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October 14, 2012 12:33 pm
I have a significant amount of shares in the SH (Short Shares). It goes up as the S & P 500 goes down. This is a Pro-Shares Fund and has a longer history than many of these inverse funds and a larger market cap than most. If you look at the chart, it flew up almost over night in August of 2011- up to about 44.00 a share, about 34.25 as I write this. In the recession of 2008- it went up over 90.00 a share in Nov-Dec, and on the crash of the first quarter of 2009, it actually… Read more »
amadeus49
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amadeus49
December 3, 2013 8:49 am

If you expect the S&P500 to go down, you’d buy call options on SDS ProShares UltraShort ?

cretus
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September 20, 2015 2:25 pm

Janet has made me back up the truck on this one.

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