Short of the Week: Buy Calls on the SKF
by Michael Shulman 09/01/09
Free Trading Guides
The bank stocks have finally hit a wall, and while many are not selling, most are not buying.
Take a look at call options on the ProShares UltraShort Financials (SKF) -- the double inverse ETF on the Dow Jones Financial Index (translation: the bank sector goes down 1%, SKF goes up 1.5% to 2%).
Buying call options on a double inverse ETF is what I call a rocket-fueled trade. With SKF call options, a bad day for the banks could mean a 50% gain for you.
But, buyer beware -- this is a very high-risk trade.
If you think you can stomach the risk, pick an out-of-the-money October call.
Let Michael Shulman help you make money on the short side of the stock market. Download a free copy of his new investing guide, Double Your Money -- and Double it Again.
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