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I used to trade FAZ and FAZ I guess one was basically the bank doing good while the other one was banks ding bad.
Wondering if there's anything similar for real estate. SPecifically looking for something that shorts commercial real estate but anything shorting real estate in general would be what im looking for.
SRS for sure. Don't plan on it being a long-term investment though. I've noticed though that even if bad numbers come out for real estate it doesn't mean that SRS will go up. It seems to correlate more with what the general stock market does. If the stock market goes up, SRS will usually be down...and vice versa.
Why do people wait until a sector hits rock bottom and then go short?
Sounds like your assuming the real estate market has bottomed out. Thoguh I would agree that I dont think residential real estate is going to go much lower, though it isn't improving anytime soon commercial real estate hasn't even begun its decline.
Also, a while back lots of people were making a killing off FAZ and FAS. Even after banking kind of bottomed out you could still make good money trading on the swings until both these stocks did reverse splits and got too expensive for myself and many others to play around with any longer
I've noticed though that even if bad numbers come out for real estate it doesn't mean that SRS will go up. It seems to correlate more with what the general stock market does. If the stock market goes up, SRS will usually be down...and vice versa.
SRS is tied (inversely) to the Dow Jones U.S. Real Estate Index (DJUSRE). If "bad numbers" don't negatively affect the stocks in the index, SRS won't be affected either. You're right, though, that the real estate index and the broader market often move similarly.
Quote:
Originally Posted by jamaicabound60565
Also, a while back lots of people were making a killing off FAZ and FAS.
Some still are making money on those two. ;-)
Quote:
Originally Posted by jamaicabound60565
Even after banking kind of bottomed out you could still make good money trading on the swings until both these stocks did reverse splits and got too expensive for myself and many others to play around with any longer
Well, I don't see how the reverse split would affect anything (it certainly didn't affect me). FAS/FAZ still move 3x the index on a daily basis, and with the same amount invested, you still make just as much money. In fact, volatility increased a bit after the split, so the potential was there to make (or lose) even MORE money.
Why do people wait until a sector hits rock bottom and then go short?
I really don't believe housing has hit bottom yet in most areas. Low interest rates and government intervention in the past year has kept in inflated, but without that eventually it still has more to go.
There is still a high unemployment rate, housing still overpriced in some markets, a shadow inventory of foreclosure homes, and very few buyers. Housing doesn't look good and eventually many of the distressed and bank-owned homes will have to be dumped on the market.
Plus, people have stopped looking at housing as an investment as much as the government still thinks it is. Fannie and Freddie are still a mess.
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