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Comment by adrr | Hacker News Reader

Why catch a falling knife? I am actively shorting S&P to protect my other holdings. SPY is the largest ETF is now hard to borrow which is just crazy to think about.

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While you're not outright advocating a trading strategy here, what you're suggesting is dangerous if you're not talking about the downsides to shorting.

Do not, I repeat, do not attempt a short without understanding all the risks.

When you buy a stock for $10, the most you can lose when that stock goes to zero is $10. In theory, when you short a stock at $10, your loss is infinite as the stock goes up higher and higher. In practice, your broker will most likely force you to cover that short long before that. Just know that the loss can be big and fast.

You should apply strategies you are most comfortable with and please do your research before attempting anything besides a long term buy and hold of index funds.

I am not advocating or suggesting anything, just stating what I am doing. My theoretical downside risk is that spy goes up 100x, my 401ks also go up 100x. I am trying minimize my risk at the expense I may give up some gains if there is bounce up.

Index funds aren’t necessarily safe. Nikkei index has never recovered from its 90s high. NASDAQ took 15 years to recover. Know the risks.

As somebody else has said, put options are available. You must be really confident to short at all

I also have puts. The cost to get into puts it extremely expensive, I am going to have to pay 125% of my gains into premiums to get any decent downside protection for my main assets. That can easily go to 0 and came close when we had that spike on Friday. Shorting index funds is far less risky. Has any index every set off the tripwire for an upward swing? If spy wasn’t hard to borrow, Id be exclusively shorting. Want to see crazy premiums look at puts on the JNK etf.

Puts are insanely expensive now with the current IV. If you're just protecting a portfolio without selling, shorting SPY is fine if you have offsets in your stocks.

I never short stock directly, but I do buy puts.

I bought SDS which is an ETF for shorting S&P500 2x. It's up 41% since I bought it. The trick though is knowing when to cash out.

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