But all and all I believe buying puts is a better way to go about trading the downside then buying short ETFs for these reasons.1. Higher rewardObviously option trading will give you a much higher percentage gain then buying or selling ETFs. If the market has a really bad day and moves down 5%, well the inverse ETF might be up 4 or 5%, but a put option could potentially be up 100% or Join other Individual Investors receiving FREE personalized market updates and research.Join other Institutional Investors receiving FREE personalized market updates and research.Join other Financial Advisors receiving FREE personalized market updates and research.
Get the latest ETF news, analysis, and commentary from the independent authority on ETFs. It requires a lotIn a Seeking Alpha article last month, Sy Harding made a good point about the lack of downside protection offered by defensive stocks:The failure of defensive stocks to protect portfolios has been demonstrated over and over again. Active traders have embraced ETFs, and ETF issuers have responded by giving these traders tactical access to nearly every corner of the global investment market.
But is it better to short-sell or buy an inverse ETF.