Home > Bear Market Gains Made Easy With Inverse ETFs (EDZ, DPK, FAZ, MZZ, TWM, DUG, QID, SDS, DXD)
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Bear Market Gains Made Easy With Inverse ETFs (EDZ, DPK, FAZ, MZZ, TWM, DUG, QID, SDS, DXD)

June 24th, 2010

“Given the equity market’s long-term trend of appreciation, expenses tied to margin debt and dividend payments, and the potential for a call on outstanding positions, short-selling is a great way for amateur investors to get in over their heads. However, that doesn’t mean they can’t bet against the market to either hedge long positions or profit from an equity pullback,” Indie Research Reports.

They go on to write, “A look at the Leveraged ETFs Index shows that there are a number of so-called reverse ETFs designed to track the inverse of a particular sector or benchmark. Today, as the Dow extends it’s recent slump, investors are earning 2% with the UltraShort Dow30 ProShares (NYSE:DXD), which tracks twice the inverse of the DJIA. Meanwhile, the UltraShort S&P500 ProShares (NYSE:SDS) and UltraShort QQQ ProShares (NYSE:QID) are also in positive territory as the respective S&P 500 and Nasdaq indices sink lower.”

“Brokerage fees, ex-dividend dates, and the hassle of unwinding a long-only portfolio can disincentivize profit-protection in the event of a market downturn. If intuition suggests that a bear market is approaching, these downsides may be worth enduring, but in cases of a short-term market dip, short-selling ETFs are a great way to limit aggregate losses. Investors who bought the UltraShort Oil & Gas ProShares (NYSE:DUG), UltraShort Russell2000 ProShares (NYSE:TWM), or UltraShort Midcap400 ProShares (NYSE:MZZ) a week ago are now ahead by more than 8% on the positions.”


“Day-traders have a number of 3x ETFs to help leverage ultra-short-term bets. Today the Direxion Shares ETF Trust Financial Bear 3x (NYSE:FAZ), Developed Markets Bear 3X Shares (NYSE:DPK), and Emerging Markets Bear 3X Shares (NYSE:EDZ) are all ahead by more than 3% as their respective sectors head south, but investors should note that given their high volatility, these instruments are recommended for day-trading purposes only,” Indie Research Reports.

We have put together some more details on the inverse ETFs mentioned in the article for you to take a look at below:

UltraShort Dow30 ProShares (NYSE:DXD) Visit Our DXD Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones Industrial Average index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort Dow30 ProShares (DXD)

 
UltraShort S&P500 ProShares (NYSE:SDS) Visit Our SDS Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the S&P 500 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort S&P500 ProShares (SDS)

UltraShort QQQ ProShares (NYSE:QID) Visit Our QID Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the NASDAQ-100 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort QQQ ProShares (QID)

UltraShort Oil & Gas ProShares (NYSE:DUG) Visit Our DUG Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Oil & Gas index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort Oil & Gas ProShares (DUG)

UltraShort Russell2000 ProShares (NYSE:TWM) Visit Our TWM Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Russell 2000 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort Russell2000 ProShares (TWM)

UltraShort Midcap400 ProShares (NYSE:MZZ) Visit Our MZZ Category: HERE

The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the S&P MidCap 400 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart forUltraShort MidCap400 ProShares (MZZ)

Direxion Shares ETF Trust Financial Bear 3x (NYSE:FAZ) Visit Our FAZ Category: HERE

The investment seeks to replicate, net of expenses, 300% of the inverse daily performance of the Russell 1000 Financial Services Index The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is nondiversified.

Chart forDirexion Daily Financial Bear 3X Shares (FAZ)

Developed Markets Bear 3X Shares (NYSE:DPK) Visit Our DPK Category: HERE

The investment seeks to replicate, net of expenses, 300% of the inverse daily performance of the MSCI EAFE Index The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is nondiversified.

Chart forDirexion Daily Dev Mkts Bear 3X Shrs (DPK)

Emerging Markets Bear 3X Shares (NYSE:EDZ) Visit Our EDZ Category: HERE

The investment seeks to replicate, net of expenses, 300% of the inverse daily performance of the MSCI Emerging Markets Index. The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is nondiversified.

Chart forDirexion Daily Emrg Mkts Bear 3X Shares (EDZ)


NYSE:DPK, NYSE:DUG, NYSE:DXD, NYSE:EDZ, NYSE:FAZ, NYSE:MZZ, NYSE:QID, NYSE:SDS, NYSE:TWM


 

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