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Careful buying ETFs as a way to short the stock. The ETFs are designed such that at any point in time, they are roughly 2x short the stock, but they do this by
by crypto_throwa 6mo ago
Careful buying ETFs as a way to short the stock.
The ETFs are designed such that at any point in time, they are roughly 2x short the stock, but they do this by buying derivatives over time which means that the stock decreasing by X or increasing by Y doesn't mean you'll gain or lose 2X or 2Y over a long time period. If the stock increases first, then decreases, you'll probably lose money even if it ends up lower than when you bought it.
I think just shorting the stock or buying long dated put options is probably a better way to do it.
https://www.investopedia.com/articles/investing/092815/risks-investing-inverse-etfs.asp https://www.investopedia.com/articles/investing/092815/risks...
This is not financial advice.
- iterateoften 6mo agoBuying options and rolling them might cost more than the decay on the etf