23.56 +0.16 (0.68%)
Pre-Market: 8:46AM EST
|Bid||23.56 x 2200|
|Ask||23.57 x 41800|
|Day's Range||23.37 - 23.53|
|52 Week Range||23.37 - 39.35|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-5.89%|
|Beta (5Y Monthly)||-1.95|
|Expense Ratio (net)||0.89%|
The S&P 500 has not experienced a 1% or more move in either direction since mid-October, its six-longest streak on record since the end of 1969 and third-longest since the end of 1995, the Wall Street Journal reports. ETFs that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns.
Exchange traded fund investors can also protect themselves against potential turns with alternative strategies as well. U.S. markets are rallying, but options traders have looked at the new high with caution, betting on the eventual misfortune of a S&P 500 pullback in the coming months, the Wall Street Journal reports. Emanuel underscored the high demand for stock protection for contracts expiring in a few months to a whole year from now, which has driven up the cost of bearish put options on the Cboe Skew Index, which measures expectations of extreme and unusual moves in the stock market, or so-called black swan events.
The third quarter corporate earnings season is looking gloomy and could test a market that has already been rocked by weak economic data and ongoing trade risks. According to FactSet, a number of companies, such as Wynn Resorts Ltd., Macy’s Inc. and Tyson Foods Inc., are already trying to temper investors' expectations ahead of the coming earnings season, warning that Q3 results could be lower than analysts had expected, the Wall Street Journal reports. Wall Street analysts have been cutting back earnings expectations for all 11 sectors in the S&P 500 in recent months as well.
The ProShares UltraShort S&P500; (SDS) is an inverse exchange-traded fund (ETF) that seeks daily investment results that correspond to two times the inverse (-2x) of the daily performance of the S&P; 500, explains Jim Woods, editor of Successful Investing.
As the earnings season begins, ETF investors should keep in mind that the upcoming quarterly results may come up short compared to what we have been accustomed to. If the estimate for a decline holds up, it would mark the first time the S&P 500 reported two straight quarters of year-over-year earnings declines in three years.
In this article, we'll explore four exchange-traded funds (ETFs) that allow you to short a market segment or sector, which can help investors earn a profit during market corrections.
The decade-old U.S. bull market has been threatened by renewed trade fight lately. Investors could ride out the downbeat sentiments through inverse or leveraged inverse ETFs as these products offer big gains in a short span.
With the return of trade war fears, the Wall Street is likely to post losses for the first time in May in seven years. Investors could easily tap the opportune moment by going short on the S&P 500 Index.
The S&P 500 is the benchmark U.S. equity gauges and one of the world's most widely used stock indexes. Around the world, trillions of dollars are benchmarked to the S&P 500.Here in the U.S., many of the largest index funds and exchange-traded funds (ETFs) are S&P 500 tracking funds. In the U.S., the world's largest ETF market, just four ETFs have over $100 billion in assets under management. Three of those funds are S&P 500 ETFs -- the SPDR S&P 500 ETF (NYSEARCA:SPY), the iShares Core S&P 500 ETF (NYSEARCA:IVV) and the Vanguard S&P 500 ETF (NYSEARCA:VOO).The S&P 500 and related funds are alluring for investors because these products are typically cheap, efficient and accurately reflective of the U.S. equity market. For investors willing to take on more risk in search of potentially higher returns, several leveraged ETFs offer exposure to the S&P 500, too.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Next 10 Months For risk-takers, here are some of the best leveraged ETFs tracking the S&P 500. Direxion Daily S&P 500 Bull 3X Shares (SPXL)Expense Ratio: 1.04%, or $104 annually per $10,000 investedThe Direxion Daily S&P 500 Bull 3X Shares (NYSEARCA:SPXL) is designed to deliver triple the daily returns of the S&P 500. So if the S&P 500 rises by 1% today, this leveraged ETF should rise by 3%. The operative word in the first sentence is "daily."Leveraged ETFs "seek daily goals and should not be expected to track the underlying index over periods longer than one day," according to Direxion.That is one point underscoring the risks of holding leveraged ETFs like SPXL for extended time frames. Another is the high fees associated with leveraged ETFs. There is little chance that, over the course of a year, SPXL will exactly mirror triple the performance of the S&P 500 and it is expensive for investors to learn that lesson as this leveraged ETF charges 1.04% per year.Think about that and then think about this: S&P 500 funds like IVV and VOO charge just 0.04% annually. ProShares Ultra S&P500 (SSO)Expense Ratio: 0.90%For traders that want to be involved with a leveraged ETF but want to decrease that juice, the ProShares Ultra S&P500 (NYSEARCA:SSO) is a fund to consider. Whereas the aforementioned SPXL looks to deliver triple the daily returns of the S&P 500, SSO attempts to deliver double the index's daily percentage performance.What that means is when the S&P 500 rises by 1% on a particular day, SSO should climb by 2%. While SSO offers reduced leveraged relative to a triple-leveraged ETF, it carries the same risks. * 10 Monster Growth Stocks to Buy for 2019 and Beyond "Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks," according to ProShares. ProShares UltraShort S&P500 (SDS)Expense Ratio: 0.90%Not all leveraged ETFs are bullish. Many are inverse and geared. The ProShares UltraShort S&P500 (NYSEARCA:SDS) is one of the largest such funds. Actually, SDS is one of the largest leveraged ETFs of any stripe.This is how this leveraged ETFs works. If the S&P 500 falls by 1% on a particular day, SDS should rise by 2%. Remember that this is a leveraged ETF and that the same risks that are relevant to bullish leveraged funds are applicable to SDS as well. Direxion Daily S&P 500 Bear 1X Shares (SPDN)Expense Ratio: 0.56%Not all inverse funds are leveraged ETFs. Some are just inverse, but inverse funds are often lumped in with leveraged ETFs, so the Direxion Daily S&P 500 Bear 1X Shares (NYSEARCA:SPDN) is worth highlighting here.SPDN is a good idea for the investor looking for downside protection without having to engage with a leveraged ETF. The Direxion fund's aim is similar: to deliver the same daily downside percentage of the S&P 500 when that index declines. As a non-leveraged ETF, SPDN can be held for long-time frames than leveraged equivalents and it is cheaper to do so as highlighted by SPDN's expense ratio. Over the near-term, SPDN is worth monitoring. * 7 Breakout Stocks In Early 2019 "Both the index and the bear fund are again approaching a cross at their 2018 starting prices," said Direxion in a recent note. "Bear in mind that CBOE's volatility index is still about where it was through October and November, 2018, which coincided with some of the market's biggest down days of the year. As in previous months with heightened volatility, it might not be entirely odd to see similar dramatic volatility in the months to come, as buyers and sellers fight it out as to whether to dig further out of the 2018 hole."As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Fundamentally Sound Dividend Stocks to Buy * 5 Reasons Reeling FAANG Stocks Won't Deliver Big Returns * 3 Reasons Canopy Growth Could Burn You Compare Brokers The post The 4 Best Leveraged ETFs to Buy appeared first on InvestorPlace.