Archive for the 'Trades' Category

Inverse Indexes

Two days ago I sold all my corporate stock positions for a 23% return earned during the previous sixty days.  Based upon the current political situation surrounding the debt ceiling I began shorting the market on Monday, July 25th betting only against indexes using 2x and 3x inverse funds.  I only trade in a cash account, no margins, only buying inverse options with settled funds just in case an 11th hour is deal is reached in Congress.  So far I’ve purchased 100 shares of ProFunds UltraPro short Russell 2000 (SRTY).  Looks to earn 300% of the inverse of the Russell 2000.  My other initial inverse buy is 100 shares of the Proshares Ultrashort S&P 500 fund (SDS).

Monday and Tuesday were flat market days with minor index losses.  My gains hovered in the lower fifty dollar range each day.  As a wrote in a comment on a CNN article: the first days will be a trickle, followed by a wave.  August 1st will be a Tsunami.  Sure enough, today picked up and I closed +$231.00.  As the market decline accelerates, and my funds become settled from Monday morning’s fire sale, I will put more into the inverses, shorting Real Estate (SRS) and finally the Dow30 (SDOW).  Today I went up 8.5%.  The next few days are going to be interesting.

No comments