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Title: Taking advantage of bear markets in RSP Post by: Super Stock Picker on October 01, 2008, 05:22:22 PM Shorting is not an option for most of us trading in their RSP but does anyone know how to take advantage of downward momentum inside these accounts? Hello bryanmcn,Bryan In RSP, you can buy PUTS or buy short ETFs. Both take advantage of downward movements. Title: Taking advantage of bear markets in RSP Post by: bryanmcn on October 01, 2008, 09:25:46 PM My own experience with option trading in Canadian stocks is that they are too thin.
But, yes, for US stocks that might work. Thanks you Bryan Title: Taking advantage of bear markets in RSP Post by: Super Stock Picker on October 01, 2008, 09:59:18 PM That's right, in Canada, you'd do better to stick with the options on ETF indexes (TSX, various sectors).
Volume on Canadian stock options is very very limited, actually, I wonder who knows about them? Institutions should, but obviously they don't use it. Title: Re: Taking advantage of bear markets in RSP Post by: Victor on October 05, 2008, 06:57:42 AM Bryan, check the Horizon Beta Pro ETFs. They provide 200% exposure to up or down movements. Tickers start with H and end in U for up or D for down. For example, if you want to "short" the TSX you can buy HXD. Since you're buying (going long the ETF) you can do this in your RRSP. Effectively you can go long/short a number of markets, equities (CDN, USD, EM), USD, Crude, NG, Gold and some sectors like financials, energy, gold miners, miners, etc. Note some of these are more liquid than others, and some have a short history (USD and 30 Yr. US Bond for example).
Options are generally very thin, but you might find enough liquidity in the big names... banks, etc. The m-x.ca website will show you the highest volume option chains which might help pick some. Cheers, Victor Title: Re: Taking advantage of bear markets in RSP Post by: bryanmcn on October 06, 2008, 07:37:11 AM Great!
Thanks Victor Bryan |