Tuesday, December 16, 2008

The cost of market insurance

With action this morning closed out one of the last two short ETF positions I had DXD, short industruials. The last remiaing one was SRS short real estate which ws stopped out on the afternoon's rally. Our third short position was stopped at a profit on 12/12/ The price of insurance using the pro shares ultra short etf's has come down in my opinion. With twice the volatility of the underlying shares and no ultra high premiums they are a better than options or short shares out right when you are just heding your portfolio. Using the qqqq put option is often very expensive and precision like timing to profit plus even though the option is highly ilquid the bid/ask spead is still high, compared to using the pro shares etfs.

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