irondoor91

ProShares' Distributions at Historic Proportions

The levered ETF's are great hedging vehicles in a margin account. I have been short a full complement of individual stocks this year, but from time to time I have used the SSO to hedge my short exposure against recoveries, such as the one from March to May and the most recent uptrend that began in late November. This allows me to hold my shorts and maintain a market-neutral position until the current rally is finished. I'll then sell the SSO and return to my fully short position.

If the market ever begins to stage a longer term recovery, the strategy mentioned above can easily be turned around by covering the short and going with a set of longs. Then, they can be hedged as necessary with a proper amount of SDS.