1. #1
    QuangX
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    Can you bet against the market?

    Let say we all know the market is going down. Can you invest in the dow dropping? How much do you need to be successful lets say today. It dropped 600 points. and I invested 5000.

    thanks
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  2. #2
    Russian Rocket
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    If you just want to short the market...say today you think that tomorrow the market is gonna crash, you can buy an ETF called Direxion Daily S&P 500 Bear 3X Shares (SPXS). It gained about 10.6% on today's market crash.

    There is also an opposite of that ETF called Direxion Daily S&P500 Bull 3X Shares (SPXL) - this one was down about 10.8% today.

    The Direxion Daily S&P 500 Bull and Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% or 300% of the inverse of the performance of the S&P 500 Index. There is no guarantee the funds will meet their stated investment objectives and that's why you see that one fund is down 10.8% while the other one is up 10.6%. These leveraged ETFs seek a return that is +300% or -300% of the return of their benchmark index for a single day.

    Keep in mind that this is not something you'd buy and hold, only use it if you're investing for short period of time...say a day or two.

    You can read more about both online...they do come with a small management fee.


    Now as far the second part of your question goes: How much would you make? I suggest since you're new and just starting out, put this 5K into your savings acct for now. Open a demo acct with one or two brokers, and start investing on those platforms first for about a month or two. Learn stocks, follow the movement of the market and see if you can actually make a profit that way, before throwing your real money into the mix.

  3. #3
    Mac4Lyfe
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    Russian with great advice. Open up a test/dummy account first to play with. The stock market option trading is just like gambling. One side is betting the stock will go up, the other side is betting it will go down. Fade the public can sometimes be often here too.

    You can fade the market with an ETF like Russian quoted above but you can also fade individual stocks as well. Today was a good day to fade bank stocks.
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  4. #4
    l7ustin
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    why not hedge against the market. esp if you have significant money tied up in it. say i have 50k in stocks and mutual funds. why not long against the market with say 5k so worst case scenario if the floor falls out of the market maybe my 5k short becomes 50k and my 50k stocks becomes 5k?

  5. #5
    CappinTerp
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    Be careful about shorting the market because of Brexit. We use to have an old saying....up on anticipation,down on the fact!! Just reverse this saying. A lot of things( info) are already priced into the market . Hedging is one thing.....we all want to make money on our investments. But now the # 1 goal is preservation of Capital!!! ​ Guys don't forget this !!!!!

  6. #6
    Mac4Lyfe
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    Quote Originally Posted by CappinTerp View Post
    Be careful about shorting the market because of Brexit. We use to have an old saying....up on anticipation,down on the fact!! Just reverse this saying. A lot of things( info) are already priced into the market . Hedging is one thing.....we all want to make money on our investments. But now the # 1 goal is preservation of Capital!!! ​ Guys don't forget this !!!!!
    I short bad companies and ride good ones. How do you know who's good and bad? Just visit a few...

  7. #7
    jjgold
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    Trading SPY good also buy or sell it or safer do call and put spreads

    1/10 of the sp index

    Penny wide spreads and great liquidity

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