When the markets throw you lemons, make lemonade, as the situation has soured and exchange traded funds (ETFs) are plentiful enough to take advantage of a bearish situation. Since ETFs trade like a stock throughout the day, it is possible to sell them short or buy on margin. Zoe Van Schyndel for The Motley Fool points this out as one way to make lemonade.
Short or ultrashort ETFs seek to give investors the inverse performance of market benchmarks. They tend to have high expense ratios, so beware that these don’t eat up the returns. Also remember that when the market heads up, these ETFs will head down, that’s just how they work. The "ultra" provides the double opposite of what the market is doing. One example is the ProShares UltraShort S&P 500 (SDS).
These ETFs and strategies aren’t for everyone, make sure you know what you are getting into.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.