Understanding ProShares UltraShort S&P500 (SDS) on Google Finance

Google Finance is a valuable tool for investors, providing real-time market data, news, and analysis. One popular security tracked on Google Finance is the ProShares UltraShort S&P500 (SDS), traded on the New York Stock Exchange (NYSE).

What is SDS?

SDS is an exchange-traded fund (ETF) designed to deliver twice the inverse of the daily performance of the S&P 500 index. Essentially, it’s a leveraged bearish bet on the overall stock market. If the S&P 500 goes down by 1% on a given day, SDS aims to increase by 2%. Conversely, if the S&P 500 goes up by 1%, SDS is expected to decrease by 2% (before fees and expenses).

Why Use Google Finance for SDS?

Google Finance provides a wealth of information regarding SDS, allowing investors to:

• Track Real-Time Price: See the current trading price of SDS and monitor its intraday fluctuations.
• Review Historical Data: Analyze SDS’s past performance, including daily, weekly, monthly, and yearly price charts. This helps in identifying trends and patterns.
• Access Key Statistics: View important metrics such as volume, market capitalization, expense ratio, dividend yield (if applicable, though unlikely for an inverse ETF), and beta. The beta is particularly relevant as it indicates SDS’s volatility relative to the S&P 500.
• Read News and Analysis: Stay informed about relevant news articles and market commentary that could impact SDS’s price. Google Finance aggregates news from various reputable sources.
• Compare with Benchmarks: Easily compare SDS’s performance with the S&P 500 index itself (SPY) to assess its effectiveness in mirroring the inverse leveraged relationship.

Important Considerations When Trading SDS

While SDS can be a useful tool for short-term hedging or speculation, it’s crucial to understand its inherent risks:

• Leverage Decay: The daily rebalancing of leverage can lead to “beta slippage” or “volatility drag” over longer periods. This means that the long-term performance of SDS may not accurately reflect twice the inverse of the S&P 500’s long-term performance. SDS is generally not suitable for holding periods longer than a few days.
• High Volatility: As a leveraged product, SDS experiences magnified price swings. This can result in significant gains but also substantial losses.
• Market Timing Risk: Successfully trading SDS requires accurately predicting short-term market movements. This is a challenging endeavor even for experienced traders.
• Expense Ratio: SDS has an expense ratio, which represents the cost of managing the fund. This fee can erode returns, especially over longer holding periods.

Before investing in SDS or any leveraged ETF, it’s imperative to conduct thorough research, understand the risks involved, and determine if it aligns with your investment objectives and risk tolerance. Google Finance is a great starting point for your research, but consult with a financial advisor if needed.