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> Spread $15 - $20M in shorts across the basket, cover them on a 15% net gain in proceeds and then shoot the canary. Eh, the percentage loss for DJI(https://ww
by cube13 13y ago
> Spread $15 - $20M in shorts across the basket, cover them on a 15% net gain in proceeds and then shoot the canary.
Eh, the percentage loss for DJI(https://www.google.com/finance?q=INDEXDJX:.DJI https://www.google.com/finance?q=INDEXDJX:.DJI ) and the NASDAQ composite(https://www.google.com/finance?q=INDEXNASDAQ%3A.IXIC https://www.google.com/finance?q=INDEXNASDAQ%3A.IXIC ) is around 1%, though. Unless you knew the exact stocks that would be disproportionally effected by this news, you're more likely to end up with around 1% net proceeds.
Which is a lot, but it's also what you could have gained just from being in the market this morning, or if you bought at yesterday's low and sold near close.
- aianus 13y agoIf you know for a fact it's going to go down you can use massive leverage to make a lot more than 1% off of a 1% movement.
- svachalek 13y agoLeverage is tricky though. Derivatives markets are orders of magnitude smaller than the stock market so setting up a big trade there would probably be as/nearly as visible as setting up a gigantic short on DOW stocks.
- MysticFear 13y agoYou can easily profit from ETF Volatility stocks (UVXY, TVIX, etc). They were up 20%+ during the 'crash'
- akeck 13y agoYes, but due to their structure perhaps, these ETFs generally seem only to go down day-to-day according to their graphs. You would have had to have bought them right before and sold at the bottom - otherwise you wouldn't make much, since you slowly lose money on these ETFs over time. Also, such a trade combo would probably appear to an investigator to indicate questionable fore-knowledge on your part.