Taking advantage of bear markets in RSP

[Super Stock Picker]

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?
Bryan

Hello bryanmcn,

In RSP, you can buy PUTS or buy short ETFs. Both take advantage of downward movements.

[bryanmcn]

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

[Super Stock Picker]

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.

[Victor]

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

[bryanmcn]

Great!
Thanks Victor
Bryan