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corranb

Need some advice on shorting the market

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Hi guys,

 

I'm wanting to short the market and would really appreciate some advice about doing this. I'm a bit of a newbie at this so please excuse any ignorant questions.

 

I want something that will give me big leverage to a large drop in the sharemarket without running the risk of being stopped out due to upside volatility.

 

From what I've researched so far I think my best approach is to buy long dated out of the money puts and then sit on them. Given that the DOW is at record highs I was thinking about putting some money into long dated puts and then just leaving it for a year or so.

 

I was curious what your thoughts were on this. So far my forays into shorting have been using leverage on e-toro which has not been that successful.

 

As far as I'm aware my current online broker doesn't offer calls or puts. Do you have any advice about an easy way to enter into these?

 

Thanks!

 

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Better to buy Puts, maybe.

That way your risk is limited

 

What markets do you plan to short?

How much do you know about how Options work?

Are to qualified to trade them?

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Thanks for the reply. Yeah, I was also leaning towards buying puts.

 

Re markets, I'm thinking about shorting the S&P500 and the NASDAQ.

I know a fair bit about how options work and have traded calls before. What do you mean by am I qualified to trade them?

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"What do you mean by am I qualified to trade them? "

 

+ Knowledge

+ experience

+ you may need to sign some documents, before you are allowed to buy options

 

I usually trade options rather than Short. And generally I prefer in the money.

I treat them like Longs or Shorts, but where I can lose a limited amout - ie the premium I pay

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You could be right (on shorting) - there are some interesting discrepancies

 

INDU / Dow Jones Ind Ave ... INDU : at 18,807.88 - new high

 

ab_zpsxfc8eq3a.gif

 

Other Indices are Not Confirming New High!

 

SOXX (iShares PHLX Semiconductor ETF) vs other indices : 10-days : UKX-vs-etc

SOXX-etc_zpsz19twqjw.gif

 

Others

=========

XLF- $21.61 -NewHigh
SPX-2,167.48 vs.2183.81,
IWM- 124.50 vs.125.88,
SOXX-109.11 vs.114.21 (-2.41, -2.16%)
UKX-6,757.69 vs.7129.83 (-70.29. -1.03%)

FTSE is getting hit today

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thanks for your input. I'm going to investigate buying puts, I think matches best with what I'm looking for.

 

The U.S markets may be on a tear at the moment but I think that'll be fairly short lived and that we'll be in for the mother of all crashes soon. We'll find out soon enough I guess :-)

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