Concerns about aggressive interest rate hikes by the Federal Reserve have widened the decline of the three major stock indexes to more than 10% this year, a measure of market volatility.S & P 500 volatility Index (.VIX.US) $It jumped nearly 30% last week.
The Nasdaq is once again approaching the bear market range this year, which also depresses individual investors who are keen on bottom-buying growth stocks. According to the latest weekly sentiment index of the American individual investors Association (AAII)Nearly 44 per cent said the market was heading for a bear market, nearly 14 percentage points higher than the historical average.
In addition, according to Refinitiv-Lipper dataU. S. equity funds had a net outflow of $16.57 billion last week, the largest weekly outflow since December 15.Streaming media giant$Netflix Inc (NFLX.US) $The sharp decline in subscribers has dampened enthusiasm for technology-related funds, with growth funds outflows of $4.89 billion for the second week in a row.
As the Fed accelerates its retreat to hawkish positions and the overall performance of US stocks is poor, many investors may be looking for ways to protect their portfolios, while reverse leveraged funds allow investors to hedge their portfolios at the lowest cost to avoid systemic risk. The following is to hear that you have sorted out several common reverse ETF:
1. Short the S & P 500
$Proshares shorted S & P 500 (SH.US) $When the S & P 500 is down 1%, SH is up 1%
$S & P 500 double short ETF-ProShares (SDS.US) $When the S & P 500 is down 1%, SDS is up 2%
$ProShares triple short S & P 500 index ETF (SPXU.US) $When the s & p 500 fell 1 per cent, SPXU rose 3 per cent.
2. Short the NASDAQ
Shorting the NASDAQ 100 Index ETF-ProShares (PSQ.US) $When the Nasdaq is down 1%, PSQ is up 1%
Double shorting the NASDAQ 100 Index ETF-ProShares (QID.US) $When the Nasdaq is down 1%, QID is up 2%
$ProShares NASDAQ three times short ETF (SQQQ.US) $When the Nasdaq fell 1 per cent, SQQQ rose 3 per cent.
3. Short the Dow Jones Index
$Dow ETF-ProShares short (DOG.US) $When the Dow is down 1%, DOG is up 1%
$DXD ProShares double short Dow Jones 30 index ETF (DXD.US) $When the Dow is down 1%, DXD is up 2%
$Proshares Dow triple short ETF (SDOW.US) $When the Dow fell 1 per cent, SDOW rose 3 per cent.
Risk Tips:
Leverage and reverse ETF refer to the one-day rise and fall of the relevant index, rather than the cumulative rise and fall over a period of time, which is more suitable for short-term trend judgment and hedge strategies, but may not be suitable for long-term investors.
When investors have a clear judgment of the market trend, or there is a need to reduce risk exposure, they can implement investment strategies through leveraged ETF and reverse ETF. However, for investors targeting long-term holdings, it may not be appropriate to use leveraged ETF and reverse ETF to operate.
In addition, in the case of volatile market conditions, leverage will magnify the risk of losses; of course, when the market is unilateral, leverage can also magnify profits. If you want to trade reverse and leveraged ETF, you must first recognize the risks!