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Is there a way to bet that something will grow more slowly than normal? S&p 500 has been growing about 10% per year. How would I "short" it and bet that it will
by Pyxl101 11y ago
Is there a way to bet that something will grow more slowly than normal? S&p 500 has been growing about 10% per year. How would I "short" it and bet that it will grow 5%? Can such a position be constructed?
- yummyfajitas 11y agoStraddle option on SPY with K=1.05 x SPY today. https://en.wikipedia.org/wiki/Straddle https://en.wikipedia.org/wiki/Straddle If you want to get clever and derisk a bit you can also limit your losses in the tails with way out of the money calls and puts.
- um_ya 11y agoIf you have never traded before, don't try to jump in without knowing all the possibilities. A more likely scenario to unfold, is that Janet Yellen does NOT raise interest rates and instead, starts QE4. In this scenario, the dollar will tank and stocks (priced in dollars) will go up. Just be cautious.