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SideShowMel0329 (48.29)

How to short the market without a margin account?

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January 14, 2013 – Comments (3) | RELATED TICKERS: SH , SPY , SDS

Hello everyone,

 My stock broker will not approve my request for margin, but I'm bearish on the market as a whole right now (we're back were we were post-recession and are we really any better off?)

 How do I short the market as a whole? Should I buy something like SH or SDS? I heard that those still don't track the inverse S&P that well...

 

What is the best approach?

3 Comments – Post Your Own

#1) On January 14, 2013 at 3:45 PM, Mega (99.96) wrote:

Unleveraged short ETFs like SH have much less negative skew than leveraged short ETFs like SDS. So SH would be better.

For 99% or more of retail investors, I would suggest raising cash if you don't like the market, not shorting.

One other possibility is buying puts. You don't need margin to do that, but again it's not a good strategy for 99% or more of retail investors.

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#2) On January 15, 2013 at 7:12 PM, L0RDZ (78.47) wrote:

How much $$$  are we talking about ?

Most brokers  will provide margin accounts unless  you  don't  have  enough money or  they think you lack the sophistication to  have margin.

If  you don't mind  letting us know  how much you have with said  broker and who they are ?  maybe  we  can find you a different broker ?

If  you want to short  the  s & p   sh  is  your best bet  if  you think as a  whole  the sp  will go down.

I'm sure  there  are  other funds  as well  also  hdge  is  an  actively  managed  short  fund.

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#3) On January 16, 2013 at 12:09 PM, SideShowMel0329 (48.29) wrote:

I use Fidelity through my employer, they did not state a reason for my denial of margin. When I was on ETrade, they gave it to me and I didn't even have a full time job...

Anyway, looking at my finances as a whole, a lot of it is in cash, so I guess I'm already prepped for a market drop.

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