Is it possible that we start to add some inverse or ‘short’ ETFs?
I realise this may be confusing to some newer investors but with a decent description (and a warning) and maybe a link to a blog post the Freetrade team might like to post… I think it could be a nice addition to the platform.
Sometime in the future I anticipate short selling and options and so on will be available via Freetrade but along with that and as a start how about adding some inverse ETFs?
My thinking exactly, there’s no need for margin here. The funds themselves are often leveraged though so one would still have to be sure about what they’re doing else you’re waking up the next day with a green market and huge losses.
I can’t see why they shouldn’t be added to Freetrade, given they’re not the same as futures or options. Nowadays during the Covid outbreak they would be a reasonable choice for many investors, and would help Freetrade to keep those transactions flowing even in times of great uncertainty. For those unfamiliar with the concept of inverse ETFs, here is a simple explanation.
Hi Dave, I got your point of view.
In some cases, Short/Inverse ETF/ETP can be a good tool to cover a specific risk during a specific timeframe. For Example: I own many ESG ETF (as I am an ESG Fan), but many of these ESG ETF have a too big exposure on Tesla or Nio… buying some EV Short ETF allow me to reduce the exposure on it.
CFD allow it too, but it is too expensive and need to open additional CFD account
and Inverse ETF are not margin based product, so I cannot lose more than the amount I put in it!
Is there any way for normal people/cows to get in on the action? I don’t see myself as betting against the UK, more as betting that the current regime will continue to be economically irresponsible and fiscally illiterate.
I don’t fancy currency trading directly, I’m just wondering if there are any funds or ETFs that offer an easier route.
I mean if you held it for 50 years, it might go close to zero (proportionally). But I hope you’re also holding some longs so its not that bad.
Other negative instruments such as options trading or like the 3xShort ETFs could see you wiped out or in negative (in US) but on the normal 1x negative it’s more just a slight risk of losing a few % in a normal year