Health Management Systems (HMSY) – 03-20-2009
HMSY has been doing okay despite the market conditions over the past 6 months. I’m still bearish overall, but you could do worse if you’re looking for bullish swing trades. There’s not much action in the options on this guy, so you would have to buy HMSY and watch closely. And of course, stocks that are strong during a market crash are typically things to keep an eye on when conditions improve too (except of course things like SDS or FAZ).
Hedging With Leverage
If SDS isn’t enough for you, there are actually triple short (and triple long) ETFs out there. I didn’t mention when they opened up at the beginning of the month, since I use options when I want that much movement, but someone asked about them so I figured I should comment. One way to use these things is to decrease your position size and put the rest of the money towards something safer.
For example, if I had $10k that I was putting into SH (1x short), I would instead put $5k into SDS (2x short) + $5k into a safe investment, or $3.3k into BGZ (3x short) + $6.7k into the safe investment. The numbers today show that the results of the ETF parts would have been SH +5.78% (+$578), SDS +11.22% (+$561), or BGZ +16.98% (+$565). Depending upon how lucrative the "safe" part is, it could be a good idea to have other investments while still hedging the same amount. Note, SH and SDS are S&P 500 ETFs while BGZ is a Russell 1000 ETF triple short, but this was just a general idea of how to split your money and why these aren’t just for the crazies.