Stocks were sharply lower to start the day as U.S. Treasury Yield rates continued to climb. Before the bell, the benchmark 10-year yield hit 3.185%, its highest level since late 2018, adding pressure to the tech stocks. Before the bell, the Dow and the S&P 500 were each more than 1% lower, while the Nasdaq traded lower by more than 2%.
“We expect the markets to remain volatile, with risks skewed to the downside as stagflation risks continue to increase,” wrote Barclays’ Maneesh Deshpande. “While we cannot discount sharp bear market rallies, we think upside is limited.”
Bearish investors may want to go near-term short on the Nasdaq- 100 Index, given the volatile backdrop for high-priced tech stocks. Today we’ll highlight the method that many of the pros on Wall Street use for doing just that. However, you don’t need to be a professional to employ this tactic.
The ProShares Short QQQ (PSQ) fund offers inverse exposure to an index comprised of the 100 largest nonfinancial securities on the NASDAQ, making it a potentially attractive option for investors looking to bet against this sector of the U.S. economy.
It’s important to note that PSQ is designed to deliver inverse results over a single trading session, with exposure resetting monthly. Investors considering this ETF should understand how that nuance impacts the risk/return profile and realize the potential for “return erosion” in volatile markets. PSQ should definitely not be found in a long-term, buy-and-hold portfolio but may be a valuable tool for more active investors looking to hedge existing exposure or bet on a decline in the top nonfinancial NASDAQ securities.
ProShares Short QQQ (PSQ) Data Summary
- Net Assets $1.17B
- Expense Ratio 0.95%
- Average Daily Volume $60.72M
Should you invest in PSQ right now?
Before you consider buying PSQ, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not PSQ.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.