Category Archives: ETFs

A Lower-Risk Way To Bet Against Oil

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Our Highest-Ranked ETF is a Bet Against Oil – And The Global Economy

Each trading day, Portfolio Armor calculates potential returns for every security with options traded on it in the U.S. Potential returns are high-end estimates of how the security might perform over the next six months, and they’re based on an analysis of price history and on option market sentiment. On Friday, the security with the 5th highest potential return in our universe (which consists of all securities with options traded on them in the U.S.) was the ProShares Ultra Short Bloomberg Crude Oil ETF (SCO), which is 2x short oil.

SCO had a potential return of 19%, which was 5th overall, but the highest of any ETF in our system. Here’s a way an investor who wants to bet against oil (and, by extension, much of the global economy) can own SCO while limiting his downside risk to a decline of no more than 15% if SCO moves against him. The best part is, the cost of this hedge is negative, so our investor would essentially be getting paid to hedge.

Getting Paid To Hedge SCO (more…)

Blame It On Rio

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Poor Brazil. Their president has the lowest approval rating in the history of any elected leader in recorded history (last I checked, 8% and falling – – even lower than Obama!), their commodities-dependent economy is in tatters, their stock market does nothing but fall, and their feces-infested waterways are freaking out those planning to be in the Olympics in 2016 who fear getting terribly ill. Sometimes things are so broken, they just keep getting worse: