Stock Picks – ProShares UltraShort S&P 500-SDS

by Sam Collins | February 10, 2010 5:18 am

 

ProShares UltraShort S&P 500 (SDS[1]) – This exchange-traded fund (ETF) seeks daily investment results, before fees and expenses, that correspond to twice the inverse of the daily performance of the S&P 500 Index (SPX[2]). The fund normally invests 80% of its assets in financial instruments with economic characteristics that should be inverse to those of the S&P 500.  

 

On Jan. 28, at $36.41, I said[3], “If the S&P 500 fails to hold above 1,080 to 1,085, then SDS could provide traders with a quick profit as the index falls.

“The target for a trade is $40 but, in the event of a major market failure, $45 should be attainable.

“However, it would be wise to place a stop-loss at $34 and consider a day trade if it becomes available, since there appears to be evidence that longer-term trades in this leveraged ETF do not fully track the market.”

Our stop-loss was not executed and recent market weakness encourages new short positions. The target is unchanged at $40 to $45.

Related Articles:

• How to Cash in on the ETF Craze[4]
• Traders Should Pick Up DEE on the ‘Double’[5]
• Don’t Buy Into Wall Street’s Bull …[6]  

---

3 Cheap, Must-Own Recovery Stocks to Double in 2010
Get the names of the best cheap stocks to rebuild your wealth in 2010. Each stock sells for less than $10 a share and is set to double (even triple!) in the next 12 months. Download your FREE report here.[7]

Source URL: http://www.investorplace.com/2010/02/stock-picks-proshares-ultrashort-s-and-p-500-sds/
Short URL: http://www.investorplace.com/?p=6010

---