ProShares UltraPro Short S&P500 (ARCA: SPXU)

最新ニュース ProShares UltraPro Short S&P500 (ARCA:SPXU)

ProShares UltraPro Short S&P500

The Fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the Daily Target. The Index is constructed and maintained by S&P Dow Jones Indices LLC. The Index is a measure of large-cap U.S. stock market performance. It is a market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected through a process that factors in criteria such as liquidity, price, market capitalization, financial viability and public float.

The stock market just got a fresh jolt of turbulence, and traders are buckling up for more. Monday's rollercoaster session saw the S&amp;P 500 index wipe out a staggering $1.5 trillion in value as trade war fears reignited. 
ETFs tracking the index closed lower: the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) closed lower by 1.75% while the Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>) and the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) were down 1.72% on Monday close.
Related: <a href="https://www.benzinga.com/general/social-media/25/03/44098232/markets-tank-after-trump-confirms-more-tariffs-heres-what-wall-street-is-saying">Markets Tank After Trump Confirms More Tariffs: Here&#8217;s What Wall Street Is Saying</a>
With tariffs on Canada, Mexico and China ramping up, volatility is officially back in business. The VIX has surged over 33% over the past month:
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="696" height="449" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM.png" alt="" class="wp-image-807881" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM.png 696w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM-300x194.png 300w" sizes="(max-width: 696px) 100vw, 696px" /></figure>
Chart source: <a href="https://www.google.com/finance/quote/VIX:INDEXCBOE?sa=X&amp;ved=2ahUKEwiiwuP0qPCLAxV0Q2cHHSTZBhcQ3ecFegQIMhAX&amp;window=1M">Google Finance</a>
But for investors, chaos breeds opportunity &#8211; if you know how to play it.
<h2 class="wp-block-heading">1. The VIX Is Screaming &#8211; Use It</h2>
The Cboe Volatility Index ($VIX) is Wall Street's fear gauge, and when it spikes, traders take notice. With uncertainty surging, options-based strategies become lucrative. 
Investors can hedge against further market swings with the ProShares Ultra VIX Short-Term Futures ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/UVXY#BATS">UVXY</a>) or the iPath Series B S&amp;P 500 VIX Short-Term Futures ETN (BATS:<a class="ticker" href="https://www.benzinga.com/stock/VXX#BATS">VXX</a>). 
But beware—these are short-term tools, not long-term holds.
<h2 class="wp-block-heading">2. Play Defense With Broad Market ETFs</h2>
When markets get rocky, smart money often rotates into low-volatility and defensive plays. 
The Invesco S&amp;P 500 Low Volatility ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPLV#NYSE">SPLV</a>) offers exposure to less turbulent stocks, while the iShares MSCI USA Minimum Volatility ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/USMV#BATS">USMV</a>) helps cushion the downside. 
For those who expect more fireworks but want to stay long equities, the SPY remains a solid way to ride out the storm.
<h2 class="wp-block-heading">3. Don't Fight The Tape &#8211; Trade Trends</h2>
With uncertainty swirling, trend-following strategies gain an edge. Investors looking for short-term gains might consider the ProShares Short S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SH#NYSE">SH</a>) for bearish exposure or the ProShares UltraPro Short S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) for amplified downside bets. 
Meanwhile, gold, often a safe-haven asset, is seeing renewed interest through ETFs like SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).
With Trump hinting at more "big" announcements by Wednesday night, expect the volatility train to keep rolling. The question isn't whether markets will move &#8211; it's whether you're ready to trade the storm.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/bonds/25/03/44096578/leon-cooperman-says-he-likes-cash-calls-trumps-deficit-cutting-contractionary">Leon Cooperman Says He Likes Cash, Calls Trump&#8217;s Deficit Cutting &#8216;Contractionary&#8217;</a></li>
</ul>
Image via Shutterstock

Long Ideas

Macro Economic Events

Broad U.S. Equity ETFs

Specialty ETFs

Economics

Trading Ideas

ETFs

PowerShares S&P 500 Low Volatility Portfolio

SPLV

SPXU

USMV

UVXY

Barclays Bank iPath S&P 500 VIX Short-Term Futures ETN

Tariffs, Trump, Tumult: How To Trade The Volatility Surge

The latest FX &amp; Rates Survey from Bank of America reveals that bond investors are hunting for long-dated Treasuries, put options on the stock market, and long positions in the Japanese Yen (JPY) versus high-beta currencies to shield themselves from the dangers connected with the <a href="https://www.benzinga.com/government/23/05/32362327/yellen-warns-of-catastrophe-if-debt-ceiling-impasse-continues-need-to-see-congress-committed-to-payi" target="_blank">U.S. debt limit crisis.</a>
Long-duration bets on U.S. treasuries were favored by 28% of the 73 global fixed-income investors polled by Bank of America, followed by stock puts at 26% and the long JPY strategy at 21%.
Also Read:&nbsp;<a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32365807/how-has-the-stock-market-historically-performed-once-inflation-peaked">How Has The Stock Market Historically Performed Once Inflation Peaked?</a>
Only 2% of respondents favored a long USD trade, making it the least popular choice. Conversely, 26% believed that the U.S. dollar could potentially appreciate if broader market risk-off ensues and investors seek a safe haven, especially if the debt limit dispute remains unresolved by its deadline.
Exchange Traded Funds To Express These Views:&nbsp;
<ul>
<li>Long-duration U.S. treasuries are closely tracked by the iShares 20+ Year Treasury Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>).&nbsp;</li>
<li>Equity puts are options strategies, but exchange traded funds like the ProShares Short S&amp;P 500 (ARCA: SH) and ProShares UltraPro Short S&amp;P500 (ARCA: SPXU) can be used to express a bearish view of the stock market. SH&nbsp;seeks a return that is the inverse (-1x) of the S&amp;P 500&#39;s daily performance, while SPXU&nbsp;seeks a return that is three times the inverse (-3x) of the S&amp;P 500&#39;s daily performance.</li>
<li>The long JPY&#39;s strategy can be implemented through a <a href="https://www.benzinga.com/money/how-to-trade-forex" target="_blank">forex broker</a>, while if investors want to gain exposure to the Japanese currency against the dollar, the ETF that mimics the JPY/USD exchange rate is Invesco CurrencyShares Japanese Yen Trust (ARCA: FXY)</li>
</ul>
Read now:&nbsp;<a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32365807/how-has-the-stock-market-historically-performed-once-inflation-peaked" target="_blank">How Has The Stock Market Historically Performed Once Inflation Peaked?</a>
Photo: Shutterstock

Short Ideas

Currency ETFs

Forex

Federal Reserve

Markets

iShares Trust Barclays 20+ Year Treasury Bond Fund

Debt-Limit Standoff: 3 Favorite Hedges For Bond Investors Seeking Shelter From Crisis

ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) shares experienced unusual options activity on Monday. The stock price moved up to $18.87 following the option alert. 
<ul>
<li>Sentiment: BULLISH</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-08-20</li>
<li>Strike Price: $18.00</li>
<li>Volume: 1685</li>
<li>Open Interest: 2364</li>
</ul>
<h2>Three Indications Of Unusual Options Activity</h2>
Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
Contracts with a strike price far from the underlying price are also considered unusual because they are defined as being "out of the money". This occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made because the underlying asset value is expected to change dramatically in the future, and the buyer or seller can take advantage of a greater profit margin. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. 
<h2>Using These Options Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Options

Analyzing ProShares UltraPro Short S&P500's Unusual Options Activity

Shares of ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) saw some unusual options activity on Friday. Following the unusual option alert, the stock price moved up to $17.48. 
<ul>
<li>Sentiment: BULLISH</li>
<li>Option Type: SWEEP</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-07-16</li>
<li>Strike Price: $17.00</li>
<li>Volume: 17817</li>
<li>Open Interest: 48674</li>
</ul>
<h2>Three Signs Of Unusual Options Activity</h2>
One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. A contract cannot be considered closed until there exists both a buyer and seller for it. 
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Understanding Sentiment</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Using These Strategies To Trade Options</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Understanding ProShares UltraPro Short S&P500's Unusual Options Activity

ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) shares experienced unusual options activity on Thursday. The stock price moved up to $17.35 following the option alert. 
<ul>
<li>Sentiment: BEARISH</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-12-17</li>
<li>Strike Price: $17.00</li>
<li>Volume: 210</li>
<li>Open Interest: 511</li>
</ul>
<h2>Three Signs Of Unusual Options Activity</h2>
Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
Contracts that are "out of the money" are also indicative of unusual options activity. "Out of the money" contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Using These Options Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

On Friday, shares of ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) saw unusual options activity. After the option alert, the stock price moved down to $17.38. 
<ul>
<li>Sentiment: BEARISH</li>
<li>Option Type: SWEEP</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-07-23</li>
<li>Strike Price: $17.00</li>
<li>Volume: 5064</li>
<li>Open Interest: 5148</li>
</ul>
<h2>Three Indications Of Unusual Options Activity</h2>
Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. A contract cannot be considered closed until there exists both a buyer and seller for it. 
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. 
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Unusual Options Activity Insight: ProShares UltraPro Short S&P500

On Friday, shares of ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) saw unusual options activity. After the option alert, the stock price moved down to $17.57. 
<ul>
<li>Sentiment: BULLISH</li>
<li>Option Type: SWEEP</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-08-13</li>
<li>Strike Price: $17.50</li>
<li>Volume: 400</li>
<li>Open Interest: 0</li>
</ul>
<h2>Three Ways Options Activity Is ‘Unusual'</h2>
Exceptionally large volume (compared to historical averages) is one reason for which options market activity can be considered unusual. The volume of options activity refers to the number of contracts traded over a given time period. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
Another sign of unusual activity is the trading of a contract with an expiration date in the distant future. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. 
<h2>Using These Options Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) shares experienced unusual options activity on Friday. The stock price moved down to $20.29 following the option alert. 
<ul>
<li>Sentiment: BEARISH</li>
<li>Option Type: TRADE</li>
<li>Trade Type: PUT</li>
<li>Expiration Date: 2021-05-14</li>
<li>Strike Price: $20.50</li>
<li>Volume: 1011</li>
<li>Open Interest: 1026</li>
</ul>
<h2>Three Ways Options Activity Is ‘Unusual'</h2>
Exceptionally large volume (compared to historical averages) is one reason for which options market activity can be considered unusual. The volume of options activity refers to the number of contracts traded over a given time period. The number of unsettled contracts that have been traded, but not yet closed, is called open interest. These contracts are not yet closed because a buyer has not purchased the contract, or a seller has not sold it.
Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset. 
Contracts that are "out of the money" are also indicative of unusual options activity. "Out of the money" contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. 
<h2>Understanding Sentiment</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Unusual Options Activity Insight: ProShares UltraPro Short S&amp;P500

Shares of ProShares UltraPro Short S&amp;P500 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) saw some unusual options activity on Tuesday. Following the unusual option alert, the stock price moved up to $20.61. 
<ul>
<li>Sentiment: NEUTRAL</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-09-17</li>
<li>Strike Price: $35.00</li>
<li>Volume: 900</li>
<li>Open Interest: 62</li>
</ul>
<h2>Three Ways Options Activity Is ‘Unusual'</h2>
Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. The number of unsettled contracts that have been traded, but not yet closed, is called open interest. These contracts are not yet closed because a buyer has not purchased the contract, or a seller has not sold it.
Another indicator of unusual options activity is the trading of a contract with an expiration date in the distant future. Additional time until a contract expires generally increases the potential for it to grow its time value and reach its strike price. It is important to consider time value because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. 
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Analyzing ProShares UltraPro Short S&amp;P500's Unusual Options Activity

In the old days, investors who wanted to use leverage needed to take positions in the futures markets. Then leveraged ETFs came along.
These ETFs use leverage and futures, but they trade like stocks. An investor who invests in them can have exposure to leverage, but they don&rsquo;t need to worry about the complexities and issues that come with trading in the futures market. The team that manages the ETF takes care of that.
They include the Direxion Daily Semiconductor Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/soxl#NYSE">SOXL</a>), the Direxion Daily Gold Miners Index Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nugt#NYSE">NUGT</a>), and the ProShares UltraPro Short S&amp;P500 (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spxu#NYSE">SPXU</a>).
SOXL is designed to return, before fees and expenses, 300% of the daily performance of the PHLX Semiconductor Sector Index. If the index is up 1%, SOXL will be up about 3%.
<img alt="soxl.png" src="https://www.benzinga.com/files/u344550/soxl.png" style="height:400px; width:640px" />
Aggressive investors who are bullish on gold could consider NUGT. It&#39;s designed to have returns that are 200% of the daily performance of the NYSE Arca Gold Miners Index, after fees and expenses. If the index gains 1%, NUGT should gain 2%.
<img alt="nugt.png" src="https://www.benzinga.com/files/u344550/nugt.png" style="height:400px; width:640px" />
Investors who are bearish on the market should consider SPXU. This ETF is designed to move three times the inverse of the S&amp;P 500 Index. If the index is down 1%, SPXU should gain about 3%.
<img alt="spxu_0.png" src="https://www.benzinga.com/files/u344550/spxu_0.png" style="height:400px; width:640px" />

NUGT

SOXL

3 ETFs For Aggressive Risk Takers

If the market goes down, there&#39;s an easy way to profit.
Many investors think the market is overvalued and they may be correct. At 2.9, the price to sales ratio of the S&amp;P 500 is the highest that it has been in at least two decades. By this measure at least, the market is overvalued.
Bearish investors should consider inverse ETFs as a way to protect themselves from, and even profit, if the market heads lower. These ETFs use complicated strategies to inversely mirror the market, but they trade as regular ETFs or stocks. This means average investors don&rsquo;t need to be concerned with the mechanics.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/21/04/20798047/heres-why-stock-valuations-are-still-quite-reasonable">Here&#39;s Why Stock Valuations Are Still &#39;Quite Reasonable&#39;</a>
The ProShares Short S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sh#NYSE">SH</a>) moves in the opposite direction of the S&amp;P 500 Index. If the index is down 1%, this ETF should move higher by about 1%.
<img alt="sh_0.png" src="https://www.benzinga.com/files/u344550/sh_0.png" style="height:400px; width:640px" />
The ProShares UltraShort S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sds#NYSE">SDS</a>) is a leveraged inverse ETF. It will make an inverse move that is twice the move of the S&amp;P 500. If the Index is down 1%, this ETF will be up by about 2%.
<img alt="sds.png" src="https://www.benzinga.com/files/u344550/sds.png" style="height:400px; width:640px" />
The ProShares UltraShort S&amp;P500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spxu#NYSE">SPXU</a>) is highly leveraged. It will move three times the amount of the S&amp;P move in the opposite direction. If the S&amp;P 500 drops by 1%, SDS will appreciate by 3%.
<img alt="spxu.png" src="https://www.benzinga.com/files/u344550/spxu.png" style="height:400px; width:640px" />

3 ETFs That Will Go Up If The Market Goes Down

Joe Percoco, co-founder at <a href="https://www.titanvest.com/">Titan</a>, an actively managed robo-advisor, discussed increasing opportunities and returns for everyday investors in an interview with Benzinga.&nbsp;
<h3>Background</h3>
In 2017, Titan was founded with the goal of&nbsp;financial innovation, leveraging best-in-class execution, clearing, custody&nbsp;and insurance in providing everyday investors access to high-alpha returns.
Via a &quot;Buffett-like&quot;&nbsp;long strategy, the firm invests users directly into a basket of 20 stocks hedged against an inverse S&amp;P 500 fund.
<h3>How It Works</h3>
&ldquo;We thought investors were being charged too many fees,&rdquo; Percoco said.&nbsp;
Titan sought to simplify investing, he said.&nbsp;
&quot;The goal was to make it easy, as if the college version of ourselves could invest. You go to the App Store, you download the app, and with a couple of taps, you can invest a minimum of $500.&rdquo;
The Titan platform itself is investor-centric:&nbsp;users can view portfolio holdings and educational offerings that help demystify stock market investing.
&ldquo;So, for instance, when Facebook stock collapsed due to one-time issues surrounding privacy, there was a lot of noise out there &mdash;&nbsp;a lot of misleading information. We [alerted users] that we didn&rsquo;t see effects in fundamentals.&rdquo;
With Titan&rsquo;s research and education offering, users can stay invested during times of uncertainty and volatility, Titan&#39;s co-founder said.&nbsp;
&ldquo;Our goal is to outperform for our clients, but we also want to educate them about investing &mdash; we don&rsquo;t just say &lsquo;put your money in and walk away.&rsquo;&rdquo;
As a result of Titan&rsquo;s unique approach, 50% of the user base accesses the app on a weekly basis, he said.&nbsp;
<h3>New Developments</h3>
Titan recently launched support for individual retirement accounts.
&quot;Retirement&nbsp;products are really convoluted and complicated. We are excited to launch our version, which is simple, super transparent [and]&nbsp;in-line with the ethos of our company.&quot;&nbsp;
Retirement account holders will have access to Titan&rsquo;s flagship portfolio of top-performing stocks&nbsp;hedged via ProShares Short S&amp;P 500 Inverse ETF holdings.
Titan charges customers a flat 1% annual advisory fee.&nbsp;
<h3>Going Forward</h3>
Titan plans to leverage financial innovations in AI and machine learning to further personalize the investing experience, improving education, transparency&nbsp;and trust.
&ldquo;If you think about the second half of our business, it&rsquo;s actually educating people on what their money is doing,&quot; Percoco said.&nbsp;
&quot;[It&#39;s a] a clever idea that [involves] having a portfolio manager send 2-minute videos explaining what happened to the market.&quot;&nbsp;
Titan is aiming to increase returns for younger generations of investors, he said.&nbsp;
&quot;There&rsquo;s a lot of great passive options, but there&rsquo;s no active option for our generation. So, next year, obviously, we hope to expand our community &mdash;&nbsp;in terms of clients and assets &mdash; and then, from there, we hope to launch new financial products and continue to refine the underlying investment experience.&quot;&nbsp;
Related Links:&nbsp;
<a href="https://www.benzinga.com/fintech/19/10/14554348/commission-free-stocktwits-app-allows-users-to-buy-sell-fractions-of-shares">Commission-Free StockTwits App Allows Users To Buy, Sell Fractions Of Shares</a>
<a href="https://www.benzinga.com/markets/cryptocurrency/19/10/14553237/coinbase-increases-trading-fees-penalizing-low-volume-traders">Coinbase Increases Trading Fees, Penalizing Low-Volume Traders</a>
Photo courtesy of Titan.&nbsp;

Fintech news covering the emerging Financial Technology services sector

Fintech

Exclusives

Interview

Titan's Mobile Hedge Fund Platform Now Services IRAs

It is often said that investors are born with a bullish bias and that bias must be unlearned through experience. No medical doctors or psychologists are behind the writing of this piece, but if they were, they would probably say there is a part of the human brain that enjoys rooting for good outcomes and against outcomes perceived as poor.
A simple explanation to be sure, but it sheds some light on why most investors and traders are &ldquo;long only&rdquo; and why, perhaps until just the past few years, short sellers were viewed as investing pariahs. This line of thinking has long applied to leveraged exchange-traded funds where &ldquo;what goes down must go up&rdquo; thinking has consistently led to more money going into leveraged bull funds <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5984991/gold-miners-etfs-are-getting-smoked">over their bearish rivals</a>.
<h3>A Little About Leverage</h3>
Indeed, it is rare that leveraged bear ETFs pull in more cash than their bull counterparts, but that is what has been happening in recent months.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7903575/something-to-gush-about-with-this-leveraged-etf">Something To Gush About With This Leveraged ETF</a></bzrelatedlink>
&ldquo;Since the end of February, investors who use leveraged exchange-traded funds have sent $1.3 billion into exchange-traded notes that pay two or three times the inverse of the market&rsquo;s return, meaning they go up when stocks fall. So big have been the inflows that the market capitalization of inverse products is on the verge of eclipsing bullish notes for the first time since 2013,&rdquo; according to <a href="http://www.bloomberg.com/news/articles/2016-05-11/hardcore-bear-etfs-poised-to-swell-past-bulls-as-inflows-surge">Bloomberg</a>.
The Bloomberg article noted money has been pouring into the ProShares UltraShort S&amp;P 500 (ETF) (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) and the ProShares UltraPro Short S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>) since February. The two ETFs have added a combined $1.43 billion since February. SDS attempts to deliver double the daily inverse returns of the S&amp;P 500 while SPXU seeks to deliver triple the daily inverse returns of the benchmark U.S. equity index.
Other data confirm traders&#39; increased in leveraged bear ETFs. For the five days ended May 10, six of the 10 Direxion ETFs with the largest volume spikes were leveraged bear funds, <a href="http://www.direxioninvestments.com/wp-content/uploads/2014/03/Direxion-Daily-ETF.pdf?utm_campaign=Daily%20Performance%20Email%20051016&amp;utm_medium=email&amp;utm_source=Eloqua&amp;elqTrackId=151d53321b1442f3a9fc0e16cfea2683&amp;elq=5826118c9e4f4bbb966b6c2e414620c7&amp;elqaid=2264&amp;elqat=1&amp;elqCampaignId=1455">according to issuer data</a>. Direxion is the second-largest issuer of inverse and geared ETFs.
<h3>Other Names</h3>
For the 30-day period ended May 10, the Direxion Daily Large Cap Bear 3X Shares (NYSE: <a class="ticker" href="/stock/spxs#NYSE">SPXS</a>), another triple-leveraged bearish play on the S&amp;P 500, averaged daily inflows of almost $3.5 million. The Direxion Daily Small Cap Bear 3X ETF (NYSE: <a class="ticker" href="/stock/tza#NYSE">TZA</a>), which tries to deliver triple the daily inverse returns of the Russell 2000, saw inflows of over $3 million per day over that period. Direxion&#39;s equivalent bull ETFs averaged daily outflows over that time.

SPXS

An ETF Rarity: Leveraged Bear ETFs Hauling In More Cash Than Bull Rivals

TWTR

VIXY

Barclays Bank iPath S&P 500 VIX Mid-Term Futures ETN

Did Twitter Mark 'The Top'?

Market Outlook for the week starting 04/29/2013: 
Market outlook via options outlook is to prep for a slow change in trend in the spy. Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) was finally able to find bidders, options traders were finally able to swing above the 400 call line to take advantage of the big move today. 
In addition, SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) has been testing all time highs, options have been giving no real appreciation in price due to the grind up nature while vol hits all time lows. This is a writers paradise across certain names such as Netflix (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>) and Priceline (NASDAQ: <a class="ticker" href="/stock/pcln#NASDAQ">PCLN</a>), strategies are outlined in the outlook video. 
In addition, We're looking a swing shorts into this week and the next. Use ProShares UltraPro Short S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>), Volatility S&amp;P 500 (VIX) and SPY options that expire in 2-3 weeks to take advantage of the short opportunity. 
Work your way in slowly. With market volatility at an all time low, there are some decent setups in the naked long put setups to capture some gains going into the week. 
Start off small. The theory of sell in may and go away could be starting now.
<iframe width="560" height="315" src="https://www.youtube.com/embed/C0ZuQ-WfIW8" frameborder="0" allowfullscreen></iframe>

Pre-Market Outlook

AAPL

NFLX

PCLN

Weekly Options Outlook for the Week of April 29

Thought For The Day... Always and never are two words you should always remember never to use. - Wendell Johnson

It is safe to say that all eyes are on Cyprus Monday morning as the proposed tax on savings accounts (10 percent on accounts over 100K euros and 6.75 percent on accounts below 100K) has brought the European debt crisis back into focus. As usual, the key here is the situation with the banks. 

First, the banks in Cyprus. Second, the banks in Greece and then the eurozone. And finally, the banks around the globe. 

Who has lent what to whom? Which banks have exposure to big losses? And won't a tax on bank deposits just mean that savers will take their money and run? And then if other countries decide to adopt this type of tax in order to get help from the eurozone, aren't bank runs a serious possibility? In short, this is what today will be all about. 

But since the banks are closed in Cyprus today (and may stay closed for a while) and the bottom line is the proposal to basically grab money from the citizens of Cyprus still needs to be approved by the country's Parliament, the severity of the current problem remains unknown. (Note that new proposals such as Russia coming to the rescue in exchange for oil/natural gas exploration rights are coming fast and furious and the government in Cyprus is already backing off of the "levy" proposal to some degree.) 

So, while we will once again be focused on the headlines, comments, and rumors out of Europe, I think it is okay to return our attention to the bigger picture of the markets this morning.

Back To The Big Picture: How To Play The Coming Correction

Although the DJIA finished lower on Friday for the first time in eleven sessions (and was red for only the second time in the last 14 days), there was some good news. First, while everybody on the planet knows that this rally is a bit extended and vulnerable, the bears didn't really get much of anything going on Friday (and it remains to be seen how much damage the Cyprus situation will actually cause). 

And second, <a href="http://www.benzinga.com/markets/13/03/3420975/does-the-dows-winning-streak-mean-anything">as detailed on Thursday</a>, a 10-day winning streak on the Dow is (a) rare (17 prior occurrences since 1900) and (b) a relatively good harbinger for the bulls.

To review briefly, if the DJIA winds up with a gain over the next two weeks, history shows that the returns for 10-day periods after a 10-day winning streak are more than six times the average return for all 10-day periods. And if the DJIA can finish higher over the next month, the average return is five times higher than normal. 

Then the returns for the next eight weeks (assuming the Dow is up for the period) have averaged +5.71 percent, or more than 5.4 times the average 8-week return. In short, THIS is what market momentum is all about. In other words, when the bulls get on a roll like this, they tend to stay on a roll.

But everybody on the planet is nervous right now - especially now that Cyprus appears to be blowing up. The macro bears (including more than a few big hedge fund names) are more than a little concerned about those short positions that have been costing them big money this year. And then the bulls are nervous because everybody knows how this type of joyride to the upside tends to end. 

So, now that the Dow's 10-day winning streak is over and the S&amp;P 500 is within a stone's throw from a new high, it is probably time to take one of two tacks. (1) Investors can decide that they've got history on their side and bet that any corrective action that appears in the near-term will be short and shallow. Or (2) you can be proactive and decide to prepare for the coming bear raid.

For those choosing option one, there really isn't much to do here. Probably the biggest thing is to be prepared to watch the action closely during the upcoming correction. You will need to be on the lookout for signs that your thesis is wrong. We'd suggest watching key support levels such as 1480 on the S&amp;P 500. 

A breach of this level would mean that the correction would be exceeding the five percent level (from Friday's closing price, that is), which would be a very simplistic method of confirming that the decline may be turning into something more than a garden-variety pullback within an ongoing bull move.

For those choosing option two, you will probably want to start taking proactive action - and soon. The reason for taking action sooner rather than later is simple: The next decline will likely involve a negative catalyst or trigger. As such, once the catalyst occurs, EVERYONE looking for such a trigger will jump on the short side at the same time. Thus, the time available to react to the move is likely to be very limited. 

Five Proactive Methods for the Upcoming Correction

1. Reduce Your Beta

The first way to play for the correction that nearly everybody in the game is looking for is to reduce the beta in your holdings. In English, this means that it is probably time to take your foot off the gas pedal a bit.

According to <a href="http://en.wikipedia.org/wiki/Beta_(finance)">Wikipedia</a>, "beta" is defined as follows: In finance, the Beta of a portfolio is a number describing the correlated volatility of an asset in relation to the volatility of the benchmark that said asset is being compared to. This benchmark is generally the overall financial market and is often estimated via the use of representative indices, such as the S&amp;P 500.

If a portfolio strategy that you employ tends to outperform - especially during rising markets - then it is a safe bet that said strategy has a fairly high beta. The idea here is to reduce the beta of the strategy by raising some cash with the goal being to bring the beta down to 1 or below. 

Here's an example. In our "Insider Buying Strategy" we buy stocks that corporate insiders (employees that are required to notify the government when they buy their company's stock) are buying - but only when they are buying heavily. (In short, this tells us that something is "up" with the company.) We take a concentrated approach in this portfolio, meaning that each holding is a 10 percent position. Such an approach has performed quite well and has outperformed the market handily. 

However, we have also learned over time that such a concentrated approach will be much more volatile than the market - especially during corrections.

So, given this knowledge and the fact that the market is very overbought, we have been raising cash recently. Currently we have more than 30 percent on the sidelines. This is due in part to the market environment and the fact that there have been very few stocks that meet our buy criteria of late. 

The goal here is to "take the turbo" off of the portfolio for a while in an attempt to retain the healthy lead we've got on the S&amp;P index this year.

2. Put On a Hedge or Two

The second way to play is to put some hedges on in your portfolio. For the uninitiated, the idea is to buy stuff that goes up when the market goes down. Yes, this approach will indeed hurt your performance if the market roars higher from here. Thus, you need to understand that putting on a hedge is like buying homeowners insurance - it has a cost and only pays when something bad happens.

The question of how to hedge (i.e. what to buy) is tricky. A popular approach is to be "long premium" via the volatility index (aka the VIX). However, note that the ETFs designed to mimic the VIX do not do so consistently for a myriad of reasons. Thus, be very careful buying ETFs such as the VXX or the VXZ as they may not deliver what you are expecting.

You can also buy ETFs designed to hedge such as the AdvisorShares Ranger Equity Bear ETF (NYSE: <a class="ticker" href="/stock/hdge#NYSE">HDGE</a>) or the ETRACS Fisher-Gartman Risk Off ETF (NYSE: <a class="ticker" href="/stock/off#NYSE">OFF</a>). But it is important to note that the HDGE is an actively managed ETF. Thus, the "bets" may not pay off as anticipated. In addition, before you bomb into the OFF, which is promoted by media darling Dennis Gartman, understand that this ETF is VERY thinly traded at times and that the "risk-on/risk-off" trade that was popular during 2010-2011 has become far less so these days.

But perhaps the most straightforward way to hedge a long-oriented portfolio strategy is to use inverse ETFs and/or leveraged inverse ETFs. Although there are many alternatives to choose from, my personal favorites are the ProShares Short S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sh#NYSE">SH</a>), the ProShares UltraShort S&amp;P (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>), which is a leveraged ETF designed to deliver 2X the daily return of the index, and the ProShares UtraPro Short S&amp;P (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>), which is a 3X leveraged short ETF.

However, given that the stated objective of these ETFs is to deliver the inverse (or some multiple thereof) on a DAILY basis, these may not be good long-term holdings. Studies show that shorting the long ETFs (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), (NYSE: <a class="ticker" href="/stock/sso#NYSE">SSO</a>), and (NYSE: <a class="ticker" href="/stock/upro#NYSE">UPRO</a>) is a more sound approach for those comfortable with putting on actual short positions.

The strategy here is to either use cash in your portfolio to buy inverse ETF's in order to hedge the remaining long positions (which, we assume, you would want to hold onto during a garden-variety market pullback) or to sell short positions. Such an approach will produce profits in the portfolio during market declines, which should offset some or all of the losses on the remaining long positions. 

3. Sell Premium

The next idea is for those folks with stock portfolios. Assuming your portfolio is of sufficient size - meaning that you hold positions of 100 shares or more - you can "sell premium" on positions you want to continue to hold in order to produce some income for your portfolio. 

In short, the idea is to sell calls on positions you want to hold (i.e. sell a "covered call"). This approach is best when the pullback is expected to be shallow. And it is also important to note that selling covered calls may cause your long position to be "called away" if the bulls continue to run. However, this is a relatively low-risk way to help your stock portfolio weather an upcoming storm.

4. Play The Rotation Game

You can also reduce the beta in your portfolio by swapping out more volatile positions with some lower beta holdings. The idea here is to take profits on stocks that have been rocket ships lately (things like Home Depot (NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>) or Google (NASDAQ: <a class="ticker" href="/stock/goog#NASDAQ">GOOG</a>)) and replace them with lower beta areas such as utilities or telecoms. 

However, it is VERY important to note that in declines - especially if they become severe - ALL stocks go down, it's just a question of degree. Thus, this approach probably provides the least amount of "defense" for your portfolio of the alternatives reviewed so far.

5. Hire a Pro (The Personal Favorite!)

Finally, you can hire a pro that specializes in long/short and/or active management strategies. This one is dear to my heart, so I'm definitely talking my book here. 

But another way to play for an upcoming correction is to hire a manager (or purchase a subscription service) that is adept at sidestepping declines and/or profiting from big corrections in the stock market, and then allocate a portion of your portfolio to this type of strategy. 

This is where my marketing team tells me that I should insert a shameless plug for our services. But, I'm not big on marketing and besides, I think you get the idea. But know that we're here to help if you are looking for some...

Follow Me on Twitter: <a href="https://twitter.com/StateDave">@StateDave</a>

-----------------------------

The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of StateoftheMarkets.com and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. One should always consult an investment professional before making any investment.

News

Hedge Funds

Financing

Events

Global

Movers

General

GOOG

HDGE

UPRO

Will Cyprus Be The Trigger? (And Ways to Play the Coming Correction)

Maryland-based ProShares, the largest issuer of inverse and leveraged ETFs and sixth-largest U.S. issuer overall, announced share splits for six of its funds and reverse splits for 11 of its products.

ProShares will split four of its ETFs on a 2-for-1 basis. Those funds are as follows: The ProShares Ultra QQQ (NYSE: <a class="ticker" href="/stock/qld#NYSE">QLD</a>), the double-leveraged equivalent of the PowerShares QQQ (Nasdaq: <a class="ticker" href="/stock/qqq#Nasdaq">QQQ</a>), the ProShares UltraPro QQQ (Nasdaq: <a class="ticker" href="/stock/tqqq#Nasdaq">TQQQ</a>), which is the triple-leveraged answer to QQQ, the ProShares Ultra 20+ Year Treasury (NYSE: <a class="ticker" href="/stock/ubt#NYSE">UBT</a>) and the ProShares Ultra 7-10 Year Treasury (NYSE: <a class="ticker" href="/stock/ust#NYSE">UST</a>).

The ProShares UltraPro Dow30 (NYSE: <a class="ticker" href="/stock/udow#NYSE">UDOW</a>) and the ProShares UltraShort DJ-UBS Natural Gas (NYSE: <a class="ticker" href="/stock/kold#NYSE">KOLD</a>) will be split on a 3-for-1 basis, ProShares said in the statement.

All splits will apply to shareholders of record as of the close of the markets on May 8, 2012, payable after the close of the markets on May 10, 2012, the firm said. Tickers and CUSIPs will remain the same.

Six bearish ProShares funds will be split on a 1-for-4 basis. They are as follows: The ProShares UltraShort Brazil (NYSE: <a class="ticker" href="/stock/bzq#NYSE">BZQ</a>), the ProShares UltraShort Dow30 (NYSE: <a class="ticker" href="/stock/dxd#NYSE">DXD</a>), the ProShares UltraPro Short QQQ (Nasdaq: <a class="ticker" href="/stock/sqqq#Nasdaq">SQQQ</a>), the ProShares UltraPro Short MidCap400 (NYSE: <a class="ticker" href="/stock/smdd#NYSE">SMDD</a>), the ProShares UltraShort Consumer Services (NYSE: <a class="ticker" href="/stock/scc#NYSE">SCC</a>) and the ProShares UltraShort Russell1000 Growth (NYSE: <a class="ticker" href="/stock/sfk#NYSE">SFK</a>).

The following five funds will be split on a 1-for-5 basis: The ProShares UltraPro Short S&amp;P500 (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>), the ProShares UltraShort Silver (NYSE: <a class="ticker" href="/stock/zsl#NYSE">ZSL</a>), the ProShares UltraPro Short Russell2000 (NYSE: <a class="ticker" href="/stock/srty#NYSE">SRTY</a>), the ProShares Ultra DJ-UBS Natural Gas (NYSE: <a class="ticker" href="/stock/boil#NYSE">BOIL</a>) and the ProShares UltraShort Russell3000 (NYSE: <a class="ticker" href="/stock/twq#NYSE">TWQ</a>). 

In the case of BOIL, that product has plunged more than 69% year-to-date and more than 83% in the past six months amid slumping natural gas prices.

All reverse splits will apply to shareholders of record as of the close of the markets on May 10, 2012. The funds will trade at their post-split prices on May 11, 2012, ProShares said in the statement. Tickers and CUSIPS will remain the same.

ProShares had over $23.5 billion in assets under management at the end of March, according to data from the ETF Industry Association.

Sector ETFs

Bonds

Emerging Market ETFs

Stock Split

Intraday Update

BOIL

KOLD

SMDD

SQQQ

SRTY

TQQQ

UDOW

ProShares Announces 11 Reverse Splits

Cusick's Corner 
We've had loose and wide trading ranges over the last week, the S&amp;Ps retracing 78% low to high in the last week. As I mentioned in the Midday, the psyche of the trader is uncertain and the market has given little clarity. Most notably today in currency action was the Euro and the breakdown below 1.36, which shook confidence in equities, creating a flight to safe havens into products like bonds and the Dollar where the action is to the upside. This also continues to pressure the commodities, Crude most notably, and may pressure Gold as well. Earnings are heavy and if you are looking at strategic approaches to these types of events, may consider looking at either a Strangle or Straddle, especially if you project a move greater than the Expected Move (ATM Straddle+ 1 strike out Strangle/2=EM). This is how you can help view volatility into an event with a bit more clarity. Tomorrow watch the Claims data tomorrow; this could give a good pulse of the consumer. See you After Hours. 
Fears about the still-unfolding European Debt Crisis rattled investors Wednesday. The table was set for morning weakness on Wall Street after Italian bond yields hit a key level of more than 7 percent. The rise in yields sparked renewed concerns about the depth and severity of the European Debt Crisis and sent the EUR/USD currency pair sliding more than 2 percent. European stock indexes also suffered losses. Germany's DAX paced the decline with a 2.2 percent drop. Events on the other side of the Atlantic continue to overshadow the domestic economic news, which included a surprise .1 percent drop in Wholesale Inventories for September. Economists were looking for a .5 percent increase. The data didn't matter much. The Dow Jones Industrial Average was down more than 200 points at midday and the decline gathered additional momentum Wednesday afternoon. At the closing bell, the Dow was down 389 points. The tech-heavy NASDAQ took a 105-point hit.
Bullish 
Universal Display (<a class="ticker" href="/stock/panl#">PANL</a>) bucked the bearish trend today. The Ewing, NJ computer component-maker specializes in production of Light Emitting Diodes (OLEDs) for flat panel displays. Shares gained 35 cents to $49.79 and options volume was 3X the daily average, after 7,580 calls and 2,325 puts traded on the stock. The top trades of the day were part of a spread, in which the strategist apparently bought 1,000 November 55 calls on PANL for $3.30 and sold 1,000 November 60 calls for $1.20. The spread, for a $1.10 net debit, is a bullish play with a potential $3.90 payoff (excluding commissions) if shares traded above $60 at the November expiration, which is at the end of next week. The entire debit is at risk if the position is held at the expiration and PANL fails to move beyond $55. The spread was initiated when the stock was up around $55 in morning trading and is not working out too well so far. The market on the spread is now 90 cents.
Bullish trading was also seen in American Superconductor (<a class="ticker" href="/stock/amsc#">AMSC</a>), Skyworks Solutions (<a class="ticker" href="/stock/swks#">SWKS</a>), and Salix Pharmaceuticals (<a class="ticker" href="/stock/slxp#">SLXP</a>).
Bearish 
Netease (<a class="ticker" href="/stock/ntes#">NTES</a>) loses $3.19 to $44.29 and options order flow on the Chinese Internet company was bearish today, with 28,000 puts and 8,380 calls traded on the stock. November 40 puts, which are 9.7 percent out-of-the-money and expire in 9 days, were the most actives. 14,838 traded and some blocks traded on the bid, suggesting put writing in NTES today. Beyond that, however, the flow seemed to include a substantial amount of put buying in November 42s, 43s and 44s. Implied volatility in the options on the stock jumped 15 percent to 61.5. Relative weakness in the underlying shares, high put volume and increasing implied volatility are all signs of bearish sentiment towards Netease. Some pre-earnings jitters might be setting in. The company is due to report on November 16, which is a few days before the November options expire.
Bearish trading was also seen in Caterpillar (<a class="ticker" href="/stock/cat#">CAT</a>), ING, and Blue Nile (<a class="ticker" href="/stock/nile#">NILE</a>).
Index Trading 
CBOE Volatility Index (.VIX) surged Wednesday! The market's "fear gauge" jumped 8.68 points, or 32 percent, to 36.16 and recorded its fourth largest one-day percentage gain for 2011, surpassed only by the big spikes on 8/4, 8/8, and 8/18. Still, VIX remains almost 25 percent below the highs of 48 seen in August. In addition, volume in the VIX pits is nowhere near the levels seen during the panic three months ago. 272,000 calls and 672,000 calls traded in the VIX pit on August 8. 321,000 calls and 200,000 puts traded in the product today, led by December 40 and 45 calls, which traded 35,700 and 52,040 contracts, respectively. So, while some players might be bracing for further gains in VIX and buying December upside calls on the index, the overall action in the volatility index is not yet consistent with the extreme fear and negativity that gripped the markets in August.
ETF Action 
ProShares Ultra Short S&amp;P 500 (<a class="ticker" href="/stock/spxu#">SPXU</a>) saw increased activity Wednesday. Shares, which move 2X the inverse of the S&amp;P 500, added $1.47 to $14.88. Meanwhile, options volume in SPXU hit two times the typical levels. 13,000 calls and 2,710 puts traded on the exchange-traded fund. November 19 calls, which are 27.7 percent out-of-the-money and expire at the end of next week, were the most actives. 2,470 traded, and with 95 percent of the volume trading at the Ask, it seems that call buyers were dominating the flow. Open interest is 1,063 and so the activity looks like opening activity. If so, November upside call buying in SPXU reflects bearish short-term trading. November options expire at the end of next week and the calls will increase in value if SPXU makes a significant move higher before the expiration - i.e. the S&amp;P 500 makes a big move lower over the next nine days.

AMSC

NILE

NTES

PANL

SLXP

SWKS

Italy Starts to Make Greece Look Good  11-09-2011

Above my desk I have a big sign that says “<a href="http://www.minyanville.com/businessmarkets/articles/precious-metals-gold-prices-silver-prices/7/25/2011/id/35921#disqus_thread">the market will always do</a> what the market has always done, misdirect, confuse and confound.” The way the <a href="http://seekingalpha.com/article/301312-s-p-500-s-friday-gain-makes-a-positive-week">S&amp;P</a>has been behaving since August is proof perfect that this slogan is as true as ever.

	 

	For those of you not conversant with the <a href="http://www.proshares.com/funds/">Ultra Pro Shares</a> ETFs Pro Shares Ultra Pro S&amp;P 500   <a href="http://seekingalpha.com/article/188253-look-out-direxion-proshares-launches-line-of-3x-leverage-and-inverse-etfs">(UPRO</a>) is a triple leveraged fund that seeks a 300% return on the performance of the S&amp;P for a single day. Conversely, The Pro Shares Ultra Pro Short S&amp;P 500 (<a href="http://www.dailyfinance.com/quote/nyse/proshares-ultrapro-short-sp-500/spxu">SPXU</a>) seeks a triple leverage or 300% return on the inverse performance of the S&amp;P 500. 

	For those of you that read me on a regular basis you know that I was certain back in August that the S&amp;P would break the support line of 1100 and from there would go to 1050 / 1020 and if things got very tight it would go to 960.

	 

	On October 3rd I was sure that I would be right as I watched the S&amp;P break the 1100 support and hit an intraday low of 1078 before closing at 1100. One or two more days of trading below 1100 would confirm my thesis and I would add to my already overweight position of SPXU. Well I was wrong. Two days at 1100 on the S&amp;P and it began its march up and I was forced to sell at about 1140 and admit that I had been fooled again. Let’s take a look at the chart below.

	 

	<img src="http://dl.dropbox.com/u/20855171/S%26P%20500%2010-23-11.png" alt="S%26P%20500%2010-23-11.png" />
	 

	As this chart will show the S&amp;P kept its march up and about two weeks ago it formed a consolidation area between 1200 and 1220. There it remained for several weeks. The S&amp;P attempted to continue to <a href="http://www.investopedia.com/terms/c/consolidation.asp#axzz1bdKka7oW">consolidate</a> last week as it traded sideways in the $1200-$1220 range. On Friday the S&amp;P 500 closed the week out at the highest prices it has seen since the decline that began in August. Buyers, however, remained impatient and only allowed a week or two of rest. This is a good show of strength as the S&amp;P could have easily experienced a deeper pullback and still remained healthy. While I believe the S&amp;P will need to take a more extended breather, (especially with the uncertainty from Europe) it may make a run towards $1260-$1270.

	 

	This is a key level to watch in the near term as it marks a prior support level from June and the approximate area of the 200-day moving average. If it breaks through the 200 DMA we will rally to the end of the year. While S&amp;P still has plenty of overhead <a href="http://www.investopedia.com/terms/r/resistance.asp#axzz1bdKka7oW">resistance</a>, the rally from its recent lows has been staggering.

	 

	In conclusion, I think that Fridays rally to 1138 was less of a rally and more of a short covering. I expect to see a pullback to the 1220 level today but there are other factors involved.

	 

	According to the <a href="http://online.wsj.com/article/SB126832878888060011.html">Wall Street Journal</a>, European leaders are nearing agreement on a plan that would see the region's banks raise around €100 billion ($139 billion) in fresh capital, said three people familiar with marathon talks taking place here on Sunday.

	 

	I must interject that the great <a href="http://seekingalpha.com/instablog/271099-nathaniel-crawford/60389-lessons-from-jesse-livermore">Jesse Livermore</a> taught us that it is not the news that means anything it is how the market reacts to the news that is important.

	 

	The bank-recapitalization plan is the easiest piece of a three-pronged bargain that the <a href="http://seekingalpha.com/article/277168-applying-the-mankiw-rule-to-the-eurozone">17 euro-zone nations</a> are hoping to reach during meetings that began Sunday and will continue through at least Wednesday. There remain disagreements on the other two measures—steps to boost the firepower of the bloc's €440 billion bailout fund and, critically, to deal with Greece's spiraling public debt through a complex restructuring.

	 

	German Chancellor <a href="http://seekingalpha.com/article/301319-price-action-sentiment-favor-bulls-but-what-if-something-goes-wrong">Angela Merkel</a>, left, walks with IMF Managing Director Christine Lagarde, center, and <a href="http://seekingalpha.com/article/297946-ecb-rate-decision-brings-currencyshares-euro-etf-into-focus">ECB</a><a href="http://seekingalpha.com/article/301319-price-action-sentiment-favor-bulls-but-what-if-something-goes-wrong">President Jean-Claude Trichet</a> during a roundtable meeting of euro-zone members at an <a href="http://seekingalpha.com/currents/post/97144">EU summit in Brussels</a> on Sunday.

	European Union finance ministers discussed the bank plan during a 10-hour session on Saturday. <a href="http://seekingalpha.com/article/164956-sweden-prepares-for-financial-collapse-in-latvia-major-bank-losses-at-home">Swedish Finance Minister Anders Borg</a> said on his way out of the meeting they had agreed to the foundations of a plan. Today will be a very interesting day.

As The S&P Goes - So Goes SPXU and UPRO

The purpose of this Q&amp;A is to offer a brief overview of Exchange Traded Funds so that you can gain a better understanding of these investment products and learn how to profit from them.

What is an ETF?

An ETF is an investment fund traded on a stock exchange. The fund can be invested in equities, currencies, bonds, commodities, derivatives, swaps, futures contracts, etc. Purchasing an ETF entitles you to participate in profits if the holdings increase in value, or to realize a loss if the holdings decrease in value. An ETF is open to any investor that has access to buy and sell stocks through any licensed brokerage account. 

What determines the value of an ETF?

The value of every ETF will always correspond to the value of its holdings, which constantly fluctuate. For example, the SPDR Gold Trust ETF (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>) is an ETF that holds bricks of gold, which are stored in a secret warehouse somewhere in London. If the price of physical gold were to increase throughout the day, the bricks of gold held by the ETF managers are now more valuable, resulting in an increase in the ETF share price. 

What is an "Index ETF"?

An Index ETF is a fund that attempts to duplicate performance of a particular index by investing in the exact holdings, in the exact same proportions, as the underlying entity (referred to as "replication").

The most actively traded ETF is the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). As outlined above, the fund holds all 500 securities in the exact same proportions as the underlying Standard and Poor's 500 Index. If the S&amp;P 500 index falls by 1.25% in any given day, it is reasonable to assume that SPY will lose approximately the same value.

Most, if not all, indexes are investable through their corresponding ETF. For example, the Financial Select SPDR Fund (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) is designed to seek investment objectives that correspond to the returns of the Financial Select Sector Index. 

What is an inverse ETF?

An inverse ETF is designed to provide investors with the opposite return of an index or commodity. For example, the investment objective of the ProShares Short Dow 30 (NYSE: <a class="ticker" href="/stock/dog#NYSE">DOG</a>) is to provide an return that is equal to the inverse of the performance of the Dow Jones Industrial Average. If the Dow were to drop 2.4%, it is very reasonable to assume that DOG would gain 2.4% in value. Likewise, if the Dow were to gain 2.4%, assume that DOG would lose 2.4% of its value.

What is a leveraged ETF?

A leveraged ETF is designed to magnify the performance of the underlying index through the use of complex swaps. A leveraged ETF can provide a return equal to two or three times the performance of the underlying index. For example, the ProShares UltraPro S&amp;P 500 (NYSE: <a class="ticker" href="/stock/upro#NYSE">UPRO</a>) ETF is designed to achieve a return of approximately 300% of the S&amp;P 500 index. If the index were to gain 1.5%, it is reasonable to expect UPRO to gain 4.5%.

There are also ETFs which provide a leveraged inverse. The ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spxu#NYSE">SPXU</a>) ETF is designed to achieve a return of approximately 300% of the inverse of the S&amp;P 500 index. If the index were to gain 1.5%, it is reasonable to expect the ETF to lose 4.5%. 

What advantages do ETF's offer?

 •	 ETFs can be easily bought and sold. ETFs offer investors the ability to buy or sell their holdings almost instantly, whereas mutual fund transactions take quite a bit of time to close (generally end of the day). That liquidity is a major benefit considering the extreme amount of volatility the market has experienced over the past few years.

•	ETFs offer significant tax advantages over mutual funds. When an investor has a gain in an ETF, he/she is not taxed until the product is sold, allowing for the investor to hold onto that gain until the closing transaction. Mutual funds, on the other hand, impose a tax for every realized gain. For example, when a fund manager makes a profitable trade, the gains are passed on to the investor along with the tax. 

 •	Modern ETFs offer exposure to products that traditionally have not been available to common investors (or too expensive), such as corn (Teucrium Corn Fund ETF: (NYSE: <a class="ticker" href="/stock/corn#NYSE">CORN</a>))

 •	ETFs can be used to gain exposure to international markets. For example, one could invest in Brazil via the iShares MSCI Brazil ETF (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>).

Why is it widely discouraged to hold leveraged ETFs for more than one day?

Leveraged ETFs are re-balanced daily, meaning that the holdings can fluctuate greatly from one day to the next. Leveraged ETFs also continuously lose value due to compounding.

 Let us take a look at the mathematics behind this using a made up ETF (XXX), which trades at $10.00. This ETF is designed to offer 3x leverage to its underlying index (XXXa), which is valued at 1,000. After one day of trading, the index gains 40 points (4%) and the ETF accordingly rises 12% to close at $11.20. The next day, the index loses the previous gain of 40 points and closes back at 1,000. This 40 point drop corresponds to 3.85%. As a result, the ETF loses 11.55% and will close at $9.91. As you can see, even though the index has retained the same value, the ETF has not. 

Does an ETF stay close to its "true value"?

For the most part, yes it does. Keep in mind that the assets being held in the ETF have a value that can be determined. If an ETF is undervalued, sophisticated traders with advanced analytic equipment will buy the ETF at its discounted price, thus pushing the value closer to its "true range". This type of trading is known as "ETF arbitrage." Sophisticated trading machines are constantly scanning the market for such opportunities, making it rare for an ETF to deviate more than 0.5% away from its "true value" for a prolonged period of time.

How popular are ETFs?

Over the past few years, ETFs have exploded in both volume and popularity. The increase in investor interest has led to the creation of a seemingly endless number ETF funds.

The ten most popular ETFs in terms of trading volume in the market currently are:

1) SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>)

2) Financial Select SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>)

3) PowerShares QQQ Trust (NASDAQ: <a class="ticker" href="/stock/qqq#NASDAQ">QQQ</a>)

4) iShares Russell 2000 Index Fund (NYSE: <a class="ticker" href="/stock/iwm#NYSE">IWM</a>)

5) iShares MSCI Emerging Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>)

6) Direxion Financial Bull 3x Shares (NYSE: <a class="ticker" href="/stock/fas#NYSE">FAS</a>)

7) ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>)

8) iPath S&amp;P 500 VIX Short-Term Futures ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>)

9) iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>)

10) Vanguard MSCI Emerging Markets (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>)
 

Is an ETF a suitable investment for everyone?

Yes and no. Many ETFs are simple to understand and provide great investment opportunities, however leveraged ETFs are designed specifically for investors with advanced knowledge since the funds hold complex derivatives and forward swaps. 

There are countless ETFs in the market to choose from, ranging from very common to very strange. Before making any trade, it is prudent to know exactly what you are buying (or selling) – so do your research. As always, potential investors should exercise caution and consult with experts whenever necessary.

Comments

ProShares UltraPro Short S&P500

ニュース

最新ニュース ProShares UltraPro Short S&P500 (ARCA:SPXU)

ニュース

パートナーシップ

ベンジンガ・グローバル