Today, the stock market, as measured by the Dow Jones Industrial Average, was down over 250 points. The Standard & Poor’s 500 was down almost 15 points, and the NASDAQ was down over five points. Walmart (WMT), a stock that has performed well over the past year, tanked by more than 10%today.
Is this a sign of things to come? If so, there are many ways to profit from a stock market crash without having to incur the unlimited risk or shorting stocks, and without having to buy puts with their own set of limitations.
Another way to play the short side of the stock market is to buy the triple leveraged bearish exchange traded funds. These ETFs provide triple the inverse return of indices. They are available for general market indices, specific industries, and countries.
There are over two dozen triple leveraged bearish ETFs. They have significant volatility, and may have wide bid and asked spreads, and low volume. Plus, the losses can be quick and substantial. They ETFs are designed for short term trading, not long term holds.
Of course, the advantage of these trading vehicles is that they are a way of shorting various indexes without actually shorting an ETF, plus there is a limit on the downside.
One of the more actively traded triple bearish ETFs is the ProShares UltraPro Short Dow30 (SDOW). The average daily volume is 1.3 million shares and the ETF was up 3.16% for the day.
In terms of industries, you have such 3X bear ETFs as the Direxion Daily Semiconductor Bear 3X ETF (SOXS) and the Direxion Daily Energy Bear 3X ETF (ERY).
To access a free list of over two dozen of these investments, go to triple leveraged bearish ETFs.