Best way to short the markets in the longterm?

[bootsyjam]

Hi there,
This has been on my mind for ages, and I keep running into brick walls with it.
I'd like to be short some markets on a longterm basis, and was bearish from about 6 months ago. The problem is, other than holding a futures contract short, or spreadbetting position short, there doesn't really seem to be any way of shorting the markets beyond these rather simplistic systems?

Have dabbled in options, and know that I can buy a put, but that this is subject to time decay and not an effective long term option. Have also looked at inverse etfs and these also do not look suitable as they mostly just last for a day, and the longest last for just a month.

Does anyone know of an investment vehicle where you can short the market long term?

Thanks,
Bootsyjam

 

[tomorton]

Good question. But surely, there isn't a direct way to do this cost effectively?

To short equities long-term in a cost-effective way, wouldn't you have to go long on bonds etc.?

 

[malaguti]

Hi there,
This has been on my mind for ages, and I keep running into brick walls with it.
I'd like to be short some markets on a longterm basis, and was bearish from about 6 months ago. The problem is, other than holding a futures contract short, or spreadbetting position short, there doesn't really seem to be any way of shorting the markets beyond these rather simplistic systems?

Have dabbled in options, and know that I can buy a put, but that this is subject to time decay and not an effective long term option. Have also looked at inverse etfs and these also do not look suitable as they mostly just last for a day, and the longest last for just a month.

Does anyone know of an investment vehicle where you can short the market long term?

Thanks,
Bootsyjam

I don't quite understand why you say an inverse ETF lasts for just a day. I'd argue you're choosing the wrong ETF. Depending on the market of course you'd like to short, there are numerous inverse etfs that mirror their counterpart.

 

[bootsyjam]

I don't quite understand why you say an inverse ETF lasts for just a day. I'd argue you're choosing the wrong ETF. Depending on the market of course you'd like to short, there are numerous inverse etfs that mirror their counterpart.

I did my research, most inverse etfs are just a day, there are very few that are a month, and it's also not the same as having a direct position short in a market e.g. a simple short FTSE bond, or something similar, for 6 months etc.


As for govt Bonds, they are all in a massive bull market and are at highs already. Not quite the same as buying the near high of stock indices! Also, as the price disconnect proves, they are not a straight bet on indices. Connected? Yes. But if indices go into freefall and at the same time, foreign buyers of govt bonds decide to dump some of them, or stop buying govt bonds, then they drop too.

 

[f2calv]

I did my research, most inverse etfs are just a day, there are very few that are a month, and it's also not the same as having a direct position short in a market e.g. a simple short FTSE bond, or something similar, for 6 months etc.

Suggest you do your research again, magaluti is correct.

I.e. buy 1MCS Boost FTSE 250 1X Short Daily ETP and you'll get the exact inverse of what the FTSE 250 does.

Maybe the daily in the name is confusing the issue, but you can hold it for as long as you wish...

 

[malaguti]

I find the DBX trackers are quite good for inverse
symbol XSPS is an inverse of the S&P
If you buy shares in this ETF your broker will not close your position the next day
you have years on me, bootysjam, so i could be still missing something and its just lost in translation as it were

 

[bootsyjam]

I find the DBX trackers are quite good for inverse
symbol XSPS is an inverse of the S&P
If you buy shares in this ETF your broker will not close your position the next day
you have years on me, bootysjam, so i could be still missing something and its just lost in translation as it were

Thanks v much for all your help
Have done my research but didn't manage to find any specific short etfs, just the fact that most of them only last a day. Do you know what the financing costs are for it? E.g. the one you mention-buy 100 of them for approx 7.5k. What are the daily carry costs? Whole new world for me!

 

[malaguti]

Thanks v much for all your help
Have done my research but didn't manage to find any specific short etfs, just the fact that most of them only last a day. Do you know what the financing costs are for it? E.g. the one you mention-buy 100 of them for approx 7.5k. What are the daily carry costs? Whole new world for me!

well if its for the long term like you said, I'd buy shares in the ETF
stamp duty on ETFs I believe were abolished, so its just the cost of the brokers commission..all depends who your broker is...call it an average £10 and then another 10 to sell them

 

[Micky89]

You can open a short position with Spreadco and they don't charge for holding overnight. I assume you can hold it for as long as you like.

 

[joseph1986]

well if you do stepwise regression you may get 50% correct open and close price but it doesn't take a genius to know that the forecast falls within 2 standard deviations from the opening price. Once the forecast hits 3 standard deviations from the opening price it's going down.......possibly by alot and you can short it. When you do the regression forecast you are essentially doing correlation estimation with other stocks bonds economic indicators etc. It can be wrong, but when the forecast for the dow today is 16790 close when you know it will probably open at 16259.....it probably is going up atleast 200 points. You will find there are about 2 or 3 days like this in any given month provided that you can get the r square above point 6

 

[joseph1986]

I say it's much easier to predict stocks this week compared to a year from now.....only guy that can predict indices a year from now goes by the name god. The variables alone would require memory the size of my home

 

[bootsyjam]

Thanks Joseph. It's not how to predict the direction, it's the best vehicle for holding a longterm position that is short the market that is NOT just a spreadbetting position.

 

[Mr Sept]

Sell a Strangle At STD 1.256/2.3.Inside the 45/21 day. Rinse and repeat.