Sam Collins

BGZ - Risky Hedge, Big Payoff

by Sam Collins   06/18/09

Direxion Large Cap Bear 3x Shares (BGZ) -- This exchange-traded fund (ETF) seeks to replicate, net of expenses, 300% of the inverse (opposite) daily performance of the Russell 1000 Index. Therefore, it is considered a very speculative trading vehicle.

But for those who are either hedging a big-cap portfolio or trading against those stocks, this could provide the leverage needed to offset a sharp pullback in those stocks.

On Tuesday, BGZ closed above its 50-day moving average, which gives it a possible trading target of $42, and a longer-term target of about $75.

This speculative ETF should only be bought by those who can afford the risk of a very volatile stock. And remember to always use a stop-loss when buying stocks with a high-risk factor.

---

Get Sam Collins' Daily Trader's Alert e-mailed to you each morning before the opening bell absolutely FREE!

In addition to getting instant access to his Trade of the Day, you'll also receive his Daily Market Outlook in the same e-mail so you can start your day off right by positioning yourself for profits!

Sign up today for Sam's FREE Daily Trader's Alert!

Sam Collins is a registered, fee-based portfolio manager who may be contacted at samailc@cox.net. You can also check out an archive of some of his most recent market outlooks.