Don’t Run From the Market — Hedge with these Opportunities

This is getting old.

Months into the coronavirus, cases are exploding again, raising the fear of more lockdowns, and a severe drag on the global economy.  In the U.S. we just saw another 70,000 new cases on Tuesday, after adding 83,000 over the weekend, bringing the total number of new cases in a single week to 500,000, according to MarketWatch.

To date, the global number of cases is now slightly over 44.06 million.  

More than 1.16 million people have now died.  

In the U.S., cases are up to nearly 8.8 million. “In 36 states, the hospitalization rate for the coronavirus increased by at least 5% over in the past seven days,” said David Madden, market analyst at CMC Markets. “Traders keep an eye on the hospitalization rates because the authorities want to ensure the health care services aren’t overwhelmed — that can often be a trigger to bringing in tougher restrictions.”

 In India, we’re up to 7.8 million.  Brazil is up to 5.4 million.  Russia just crossed 1.55 million. France is up to 1.2 million.  Spain is at 1.1 million.

And it’s only getting worse with further market downside likely.

The last thing you want to do is panic in the chaos.  We have to remember markets are resilient and can bounce back from this, too.  Instead of running from the market, you may want to consider hedging for further potential downside.  You can do that with these opportunities.

ProShares Ultra VIX Short-Term Futures ETF (UVXY) 

Volatility ETFs, such as the ProShares Ultra VIX Short-Term Futures ETF (UVXY) are rising along with the Volatility Index (VIX) as the markets melt down ahead of the U.S. elections, and on rising coronavirus case numbers.  

iPath S&P 500 VIX Short-Term Futures (VXX) 

The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index. The VXX last traded at $25.74 and could easily run well above $30, near-term with the chaos.

ProShares VIX Short-Term Futures ETF (VIXY)

ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.  The VIXY last traded at $21.10 and could run above $25, near-term, as well.

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