So here at Wealthpin, we like simple ways to achieve investment goals.
And in the past if you wanted to bet against a stock, you would have to use more complicated instruments like options or future contracts.
But now, thanks to inverse ETFs you can buy and sell a single stock ticker that represents those bets without having to do anything more complicated.
So if you want to bet that the Chinese economic decline will continue, you can use this ticker:
ProShares Short FTSE China 50
Important warning: the way this fund is constructed, you shouldn’t hold the position for more than a day.
This is usually the case with these kinds of funds, so use it to make a play within a single day. This is an inverse fund with exposure to the 50 biggest stocks in China. So the value of this fund will go up as the value of those stocks go down.
Recently, as the Chinese economy has been crashing, this has been a very profitable play, with gains as high as 20% in a single day.
You can also use this as a true hedge – meaning that if you hold Chinese stocks like Ali Baba for the long term and you’re worried that they will go down in the short term, you can balance that exposure out with this fund.
All in all, it’s an aggressive way to bet on the Chinese economy over the course of a single trading day, and we like having access to tools like this that don’t require options or futures contracts.