Complete Archives
Buy SKF to Short U.S. Financials
I have been trading in and out of the ProShare Ultrashort Financials ETF (SKF) for the past two months. For more info on the index please go to the ProShares site.
The index is 200% of the inverse of the performance of the top financial firms in the U.S. found in the DJ U.S. Financials Index. Given the subprime mortgage mess, the closed down credit markets, closed leverage loan markets, and recession fears does anyone really think that financial stocks are ready for a rally. SKF is very volatile since it is twice the inverse exposure. I have been buying SKF in the low 90s and high 80s during weeks when I think there will be significant negative market news for financial stocks. SKF also is a great hedge on financial stock exposure. For example if you owned $10K of GS and $10K of MS you would only need to be 10K short of SKF to be market neutral on the financial sector with these names.
Discussion
3 comments for “Buy SKF to Short U.S. Financials”
Post a comment
Random Wall Street Quote
Life all comes down to a few moments. This is one of them. - Bud Fox
Street Fees
- Payday Loan
- Find and Compare Credit Cards
- IRS Problems
- Debt Cures Book
- Stock Market News
- Foreclosures for Sale
- Credit Cards For Business
- About Prime Brokerage
- business loan
Pitchbook
Recent Comments
- money never sleeps on Money Never Sleeps Pal
- Montag’s Pay Package | Prince of Wall Street on Ken Moelis on Private Equity and Investment Banking
- Anonymous on Oil Prices: Reason Trumped By Transparent Pandering
- Reasons To Sell Financials Now | Prince of Wall Street on Buy SKF to Short U.S. Financials
- Reasons To Sell Financials Now | Prince of Wall Street on Contrarian Goldman Leverage, Liquidity, & Regulation
The Deal Team
- Abnormal Returns
- Accrued Interest
- BankersBall
- Big Picture
- BloggingBuyouts
- Calculated Risk
- Crossing Wall Street
- DealBook
- DealBreaker
- Dealmaker
- DealScape
- EconBrowswer
- Epicurean Dealmaker
- Financial Crookery
- Footnoted
- Free Exchange
- FT Alphaville
- Going Private
- HousingWire
- Howard Lindzon
- Infectious Greed
- Information Arbitrage
- Intelligent Speculator
- Interfluidity
- Leveraged Sellout
- Mergers and Inquistions
- Mortgage News Clips
- Naked Capitalism
- PE Hub
- Reuters DealZone
- RGE Monitor
- The Deal
- Trading Goddess
- Wall Street Oasis
Do you think the financials drop will start to subside now? I’m contemplating dipping into financials again. I’m looking to trade BAC, GS for now, but will probably start adding bank positions come Feb
Invest with Dax’s last blog post..Time to Buy Financials?
Trading SKF these days can result in a series case of whiplash. With an unpredictable FED in FULL EFFECT there isn’t enough return in this ETF to compensate for the risk in being long OR short (UYG being the unlevered long version).
modestmerlin’s last blog post..The Deal Breaker Files: LV Handbags
[...] Given the continued disarray in the credit market and the other headwinds faced by the sector, like a U.S. recession and deteriorating consumer credit performance, the recent rise in financial stocks may be premature. Financial stocks in the S&P 500 are up more than 15% since their lows in mid-March when Bear Stearns got saved. The difficulties in the credit markets are not even half over and fixing these markets will take even longer. There are still lots of risks to financial firms. The prince believes that credit deterioration will accelerate and banks will dilute earnings by raising more equity capital. With all the aforementioned risks to the downside The Prince thinks it makes sense to short financials. As the Prince has written earlier, an easy way to sell short financials is by buying SKF. [...]