re: What's everyone been buying? Here's the one week performance for S&P as of 12/24

Short S&P ETFs

SH has no leverage and will track the S&P inversely almost tick for tick
SDS is levered and will decay if you hold too long but will give you 2X the inverse of S&P 500

ETF's that provide the inverse of the daily return of the S&P 500. So if the S&P 500 is up 1% on the day, SH should be down 1%. If the S&P 500 is down 2% on the day, SH should be up 2%. SDS is 2x leveraged, meaning it provides double the inverse returns.

I consider them to be better alternatives to shorting partly because their fees are less than borrowing costs for shorting and partly because of compounding. If the S&P fell by 5% two days in a row, the S&P would actually be down 9.75% (.95*.95=.9025-1) at the end of those two days. SH, meanwhile, would be up approximately 10.25% (1.05*1.05=1.1025-1). SDS would be up approximately 21% (1.1*1.1=1.21-1). That sounds great with SDS, but decay can mess up those results. Decay is when a leveraged position loses performance due to the leverage and choppy movements by the underlying. For example, if the S&P 500 went down 5% one day and up 5% the next, it would be down 0.25% (.95*1.05=.9975-1). SDS would be down 1% (1.1*.90=.99-1).

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Hussss

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Please go away

I’ve bought puts in TSM, MS, SPY, IWM, DRI AND CALLS IN TWTR which got spanked today

Let me rephrase, I have puts in above ^

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Nice to know SH doesn't really have decay. Thanks

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Yeah, it doesn't have decay because of lack of leverage. It just does the inverse. Here's a comparison between the S&P 500, SH, SDS, and SSO (2x long S&P leveraged ETF). The S&P and SH just do the opposite, but SDS and SSO lose value because of decay's two main factors: choppy movements and leverage.



EDIT: I didn't realize until too late that several columns are redundant. Whoops!

So that post was about decay, which requires leverage and choppy underlying. No leverage, and the ETF/ETN will match the underlying or inverse it. But what if the underlying trends instead of chops? Here's what happens:



As you can see, SH and S&P still did the opposite of each other because there is no decay, just an inverse relationship. But SSO and SDS either crash and burn or produce returns more than 2x the S&P's even though they provide 2x the daily returns.

Many people wonder why they can't just short a leveraged ETF and its inverse and profit through decay. This, along with borrowing costs, is why.

Conagra (CAG) getting murdered. Down nearly 25% in two days

Added CAG to the watch list. Read some damning articles about the CEO of the company they just acquired.

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10k shares of AKRX and 1k shares of FCX today

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I don’t know anything about these companies, but you’re the arguing that the S&P 500 is heading towards 1,300 and you just bought $45,000 of stock that was worth $341,000 a year ago, with no dividend to at least lessen the losses?

Edit: I incorrectly said he bought $35,000 in stock and it was actually $45,000 ($44,550 at current price).

Freeport-McMoRan Inc (FCX:NYSE)