Short the Market

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 1) Proshares S&P 500 Short ETF (SH): This ETF is an inverse ETF that trades at a -1 to 1 performance of the S&P 500. For every 1% that the S&P 500 falls, the SH will gain 1%. When S&P 500 selling picks up, I prefer to purchase an equal weighted stake of SH to my other positions in a long-term portfolio. I don’t want to sell my long-term positions, but I do want to hedge against a downturn. 

2) Options on the Proshares S&P 500 Short ETF (SH): There is an active options chain for this ETF. If you purchase the in-the-money call for the following month (March 17, 2023), you can replicate the performance of 100 shares of the ETF with a small amount of capital. The only difference is that it will require some ability to pay for time in the options chain. I don’t like to use spreads largely because it caps the potential upside of the trade. 
3) ProShares UltraPro Short S&P500 (SPXU): Finally, there is the high-octane trade. The SPXU is an inverse 3x ETF that makes 3% for every 1% that the SPX declines. This is a way to hedge against larger positions against much bigger declines that typically come from negative momentum events. I don’t like to own a lot of this, and I prefer to never hold it over the weekend. But it’s a very good tool for day traders and individuals who have a lot more risk tolerance in this market. 

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