Going Short by Going Long

If you think the stock market is going down, you have a few options. You can short stocks or Exchange Traded Funds [ETF's], you can buy put options, or the latest alternative, UltraShort ProShares Exchange Traded Funds [ETF's] which attempt to track twice the inverse of the daily performance of various indices. Many investors don't like shorting stocks or ETF's due to the unlimited risk and the dividend costs. In addition, some investors don't like put options because of the premium and the time limits.

However, the ProShares ETF's allow investors to take long positions with no time limit while still speculating that the market will drop. These ETF's are able to do this because they hold positions in financial instruments such as derivatives, which benefit from drops in prices of certain indices.

The ProShares series has regular short ETF's, such as the Short Dow30 ProShares (DOG), which has a great stock ticker symbol by the way. Yet, you get the biggest bang for the buck with the UltraShort ProShares which provides twice the return [or loss] from the movement in the index, in a reverse fashion. In other words, if the Dow Jones Industrial Average goes down 10% in one day, the UltraShort Dow30 ProShares (DXD) should increase in value by 20%, double the rate of decline in the Dow.

Here is a selection of UltraShort ProShares ETF's to make significant returns if the market or certain indices drop:

UltraShort Basic Materials ProShares (SMN) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Basic Materials Index.
UltraShort Consumer Goods ProShares (SZK) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Consumer Goods Index.
UltraShort Consumer Services ProShares (SCC) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Consumer Services Index.
UltraShort Dow30 ProShares (DXD) attempts to track twice the inverse of the daily performance of the Dow Jones Industrial Average.
UltraShort Financials ProShares (SKF) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Financials Index.
UltraShort Health Care ProShares (RXD) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Health Care Index.
UltraShort Industrials ProShares (SIJ) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Industrials Index.
UltraShort MidCap400 ProShares (MZZ) attempts to track twice the inverse of the daily performance of the S&P MidCap 400 Index.
UltraShort Oil & Gas ProShares (DUG) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Oil & Gas Index.
UltraShort QQQ ProShares (QID) attempts to track twice the inverse of the daily performance of the NASDAQ 100 Index.
UltraShort Real Estate ProShares (SRS) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Real Estate Index.
UltraShort Russell MidCap Gr ProShares (SDK) attempts to track twice the inverse of the daily performance of the Russell MidCap Growth Index.
UltraShort Russell MidCap Val ProShares (SJL) attempts to track twice the inverse of the daily performance of the Russell MidCap Value Index.
UltraShort Russell1000 Growth ProShares (SFK) attempts to track twice the inverse of the daily performance of the Russell 1000 Growth Index.
UltraShort Russell1000 Value ProShares (SJF) attempts to track twice the inverse of the daily performance of the Russell 1000 Value Index.
UltraShort Russell2000 Growth ProShares (SKK) attempts to track twice the inverse of the daily performance of the Russell 2000 Growth Index.
UltraShort Russell2000 ProShares (TWM) attempts to track twice the inverse of the daily performance of the Russell 2000 Index.
UltraShort Russell2000 Value ProShares (SJH) attempts to track twice the inverse of the daily performance of the Russell 2000 Value Index.
UltraShort S&P500 ProShares (SDS) attempts to track twice the inverse of the daily performance of the S&P 500 Index.
UltraShort Semiconductor ProShares (SSG) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Semiconductor Index.
UltraShort SmallCap600 ProShares (SDD) attempts to track twice the inverse of the daily performance of the S&P SmallCap 600 Index.
UltraShort Technology ProShares (REW) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Technology Index.
UltraShort Utilities ProShares (SDP) attempts to track twice the inverse of the daily performance of the Dow Jones U.S. Utilities Index.

Author owns SRS.

By Fred Fuld for Stockerblog.com