Investment Strategies / Mechanical Investing❤
No. of Recommendations: 5
I just stumbled over my beloved CNN index:
https://edition.cnn.com/markets/fear-and-greed78! I donīt remember when Iīve last time seen it that high, with all indicators apart from one signaling "Extreme greed". Itīs very rare.
What's the best way to profit from an expected short/middle term drop?
Iīd love to buy puts (on the index, too much work+risk for single stocks), but canīt find such, so the only option I see are inverse ETFīs. I vaguely remember once I had one with 3x leverage (but if possible I want higher leverage).
No. of Recommendations: 5
Puts on the QQQ and SPY are liquid and widely available.
Long volatility could work as well with futures on the vix or long VXX (some other vol etf).
Here's a list of short ETFs you could buy as well:
https://etfdb.com/themes/inverse-short-etfs/
No. of Recommendations: 2
Interestingly apart from VIX futures perplexity.ai which I asked didn't mention any of that, had no idea that I could simply buy puts on the SPY.
Thank you!
No. of Recommendations: 6
Iīd love to buy puts (on the index, too much work+risk for single stocks), but canīt find such, so the only option I see are inverse ETFīs. XSP options. MINI SPX
Here is part of the .XSP Jul 17,2026 option chain from Fidelity.
Strike Bid Ask Volume Open Int Imp Vol Delta
PUTS XSP at $627.94
618 31.21 32.18 0 0 17.89% -0.3701
619 31.49 32.46 0 1 17.83% -0.3733
620 31.9 32.58 0 4 17.77% -0.3764
621 32.06 33.04 0 0 17.71% -0.3797
622 32.35 33.33 0 0 17.65% -0.3829
623 32.64 33.63 0 82 17.60% -0.3862
624 32.93 33.92 0 0 17.54% -0.3894
625 33.37 34.05 0 0 17.48% -0.3927
626 33.52 34.53 0 0 17.42% -0.3961
627 33.82 34.83 0 0 17.36% -0.3993 This and above are OTM
628 34.13 35.14 0 0 17.30% -0.4027 This and below are ITM
629 34.44 35.45 0 0 17.25% -0.4062
630 34.87 35.59 0 0 17.18% -0.4096
635 36.5 37.21 0 0 16.89% -0.4271
640 38.16 38.91 0 0 16.60% -0.4453
650 41.8 42.63 0 0 16.05% -0.4835
660 45.86 46.68 0 0 15.51% -0.5239
670 50.37 51.23 0 1 15.02% -0.566
680 55.37 56.27 0 0 14.56% -0.6093
690 58.55 59.1 0 0 -- -0.6534
No. of Recommendations: 10
78! I donīt remember when Iīve last time seen it that high, with all indicators apart from one signaling "Extreme greed". Itīs very rare.
This is one variable I track. The last time I recorded it at 78 or higher was 12/19/23 when it hit 80. The SP500 closed at 4768.37 that day and rallied for the next year..
Be careful.
No. of Recommendations: 4
Fear & Greed Index
Last updated Jul 7 at 10:53:43 AM ET
Previous close
78
1 week ago
65
1 month ago
60
1 year ago
49
So in one week the index leaped up. Why? because of the april dip maybe.
GD_
No. of Recommendations: 1
Be careful
Thanks to you (and info from Zeelotes) I did not buy puts. Wrong time.
Thank you!
No. of Recommendations: 7
What's the best way to profit from an expected short/middle term drop?
Perhaps a better question is, what is the best way to profit from a future drop in such a way that the cost is negligible if you're wrong?
I tend to agree that the short term is about as bullish as it gets--a gap up on an all time high day--so it's probably better to wait for a few cracks to appear. Breadth is quite poor given the level of exuberance, so to me it has a certain smell of "extreme bullishness for now, but perhaps later in the bull than you might otherwise guess".
I'm sure others can suggest better methods to decide when to place your bearish wager, but it's conceivable that good old NH-NL might even be useful as an input. e.g., at some point in February one might have decided that it had not only gone negative but decisively so. No matter when that month you decided that, it was a good time to sell for a little while : )
Jim
No. of Recommendations: 8
Perhaps a better question is, what is the best way to profit from a future drop in such a way that the cost is negligible if you're wrong?
I suppose that to answer my own question, certainly the simplest would be to sell anything you own that seems overvalued.
Sitting on cash isn't so bad, sometimes. Until the market tops you feel like a FOMO idiot. While the market drops you feel like a genius, but still panicKing about the stuff you *didn't* sell. Then after the bottom you get the FOMO feeling again, sitting on cash for a bit while everything zooms, until you cave in and buy stuff. Still, you're richer afterwards than you would have been!
Jim
