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    Shorting the market

    Question: And i hope i am not running afoul of mods. I know enough about investing but this i can’t find an answer for.

    Say I think this market is way overvalued, and i have 10k and i want to short the market. I don’t want to short particular stocks, but i want to short S&P 500 or some index like that and i don’t want to short it for one day, i want to short it for next 3 to 6 months. And i want my total exposure and liability to be only the 10k that i invest. If i lose my money then 10k is all i lose.

    Is there an ETF or other vehicle that allows one to do this?

    Shorting the market
    byu/rmtabib instocks



    Posted by rmtabib

    31 Comments

    3. Naive_Acanthisitta36 on

      You could just buy $10k worth of put spreads with various expiration dates!

    6. Simalt443 on

      You obviously have no clue what you are doing and shouldn’t try to time the market but if you need to you just buy 10k of spy puts 3 months expiry.. Premium paid is max loss.

    7. raisedeyebrow4891 on

      I just lost $10k shorting the market with puts, you’re welcome to join me.

    9. Fri3ndlyHeavy on

      Shorting means you are borrowing something (a stock, usually) from someone and selling it. Then, when (hopefully) its price drops later, you rebuy it and give it back.

      Because price can increase infinitely, you **cannot** short with the expectation that your maximum loss is the $10k you put in.

      Also, with a timeframe of 3-6 months, shorting would be quite expensive due to borrowing costs, even if you are profiting.

      So, to do what you are asking, your only option is to Buy puts in option trading.

    10. Mental_Ingenuity_310 on

      You set a stop loss on your short

      But if you really believe that you should buy putts like people are saying and leverage your move

    11. HorsedickGoldstein on

      More risky: SPY puts 3-6 months out
      Less risk, but still risky: SQQQ or an inverse market etf, leverage optional

    12. Alicyclobacillus on

      I use SPXU

      3x leveraged inverse ETF

      Buy in morning, watch it constantly, sell usually the same day

      Fun for market timing, also use SPXL if I think we’re gonna pump

    14. Large-Science-8599 on

      SPXS is 3x shorting spy. You can buy 10k worth of spxs, and you can’t lose more than 10k.

    15. OldHamburger7923 on

      Sell futures, /ES. You’ll make $50 per point the market drops. Costs like $5 each. But you’ll end up bankrupt in short time because I doubt this ends the way your think it does.

    17. Preme2 on

      This is like giving someone a weapon and not telling them how to use it. Don’t hurt yourself OP lol.

      > I think this market is way overvalued

      Something something irrational, something something solvent lol.

      Just give me the 10k I’ll put it to better use.

    19. BeautifulAuthor9167 on

      Avoid the leveraged -3x junk like SPXS for a 6 month hold; the decay will eat your lunch before the crash even happens.

    20. Micheal_Hancho on

      You can buy puts, sell call credit spreads, or some combination of both.

      For example, you can sell a 725 call and buy the 735 or 745 call for 5/29 and get about $300 -$600. If you get the direction right then you keep a lot of the premium. You don’t get the direction right but SPY stays below 725 you can still profit.

    21. Master-Sky-6342 on

      In the casino, you lose generally.
      Do not try to time it.
      Do not hold leveraged ETFs long. Your investment will erode fast due to volatility decay.

      Markets can stay more irrational than you can stay solvent.

      You are welcome.

    22. Mandatory_Fun_2469 on

      Stop losses aren’t ideal because the price can shoot way beyond the price you set before the trade gets executed. But you can actually use call options to limit your losses. Say NVDA is $200 and you believe it’s going down… so you sell short 100 shares of NVDA, but at the same time buy one call option with a $400 strike price. That way if the price rockets beyond $400, you won’t lose more than your original investment (plus the cost of the call, but these are usually pretty cheap that far out of the money).

      For some reason this method doesn’t seem to be that well known among retail traders, but it’s really the only way to short safely. Keep in mind that protective calls do expire after a time though, so you’ll either have to buy another one or close out your position at that point.

    23. FistEnergy on

      You buy put contracts. Then you can only lose the cost of the contracts.

      I don’t have the balls to do it myself, but I definitely think a sudden correction of 15-30% is still likely in the next few months. You just can’t shut off Gulf oil/gas/helium production for months (and crimp their output for 1-2 years) without massive consequences. You just can’t.

    25. HomeworkAdditional19 on

      Reminds me of something my dad once told me: “every man has an idea for making money that will not work.”

    26. beefydontdie on

      Be careful trying to short the market. The amount of printed money in the world is ever increasing and the majority of that money gets invested somewhere. Real estate, companies, stocks. The market goes up and down but it is tough to see it staying down for long unless our financial system collapses, in which case your money is worthless no matter what you do with it.

      Shorting sectors is a different matter.

    28. tx_2a on

      You need to do a lot more research. Even if you’re right, anything short flawless timing and execution you will lose it all.

    30. kudrat1 on

      man 10k is a lot of money for most people. I would suggest withdraw some 2k and travel. you can book very good hotels. you can think it is kinda free because you would lose it anyways.

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