Leverage a Bet Against Semi Stocks


ProShares UltraShort Semiconductors (NYSE: SSG ) - This leveraged exchange-traded fund ( ETF ) seeks daily investment results that are twice the inverse of the daily performance of the Dow Jones U.S. Semiconductor Index. 

After falling from a high of over $90 in February 2009, this inverse ETF appears to be forming a solid bottom.

In early May, it broke through its bearish resistance line, and then formed a triple-top following heavy accumulation. A break through the triple-top should launch SSG to the $24 to $26 zone and even change the long-term trend of semiconductors. 

Keep in mind that "ultra" ETFs and very speculative, since they entail unique risks over periods as short as a single day. Results can be affected substantially by compounding, and returns over longer periods will likely differ in amount and even direction, so these products require active monitoring and management.

The SEC warns that leveraged ETFs are not suitable for all investors, and are especially not suitable for long-term investors.

If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net

SSG Chart

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: ETF

Sam Collins

Sam Collins

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