S & P 500 Question: If I believed that the S & P 500 would

[pokercat999]

fall to below 800 in early (1st Q)2011 and had some spare change to "play" the market what would/could/should I do?

I'm in all cash now and have never invested in stocks.

Thanks for your input in advance!

[Orrex]

1. Stuff all of your money in a mattress and then guard that mattress with your life

[notesdev]

8. I second that notion

Don't put your money out there to be stolen, because it WILL be.

[rfranklin]

2. Sell mini S&P Mar 2011 futures...

You need about $6000 margin for each E-mini contract that you sell.

The other alternative is to buy a "bear" ETF that tracks the S&P.

[A HERETIC I AM]

3. Or buy a Put on "SPY"

http://finance.yahoo.com/q/op?s=SPY&m=2011-03

But just as you mention, you would need a margin account to do so.

[jtuck004]

5. + either of those options n/t

[Po_d Mainiac]

4. ProShares UltraShort S&P500

Exchange Traded Fund (ETF) ticker symbol SDS

This fund moves at 2X the e/s mini. In other words if the S&P 500 is up 1% on the day, the fund will lose 2%. If the S&P is down 1%, the fund will climb 2%.

This is not a margin account, therefore you can lose all your money, but not more than you put in. It currently is trading at $27.41/share. ALWAYS READ THE LITERATURE BEFORE YOU BUY!

If you have an on-line trading account, you can buy and sell just like any other listed stock.

If you firmly believe that the index will drop this is one way to trade on that theory.

Good luck

ps....There are multiple explanations for the the recent market moves, IMHO, none of which really are based on fundamentals. Earning can really suck, but if the U$D continues to slide, don't be surprised if the index holds or even climbs, regardless of the 70% volume that holds for an average of 11 seconds. And yes I am aware of the # of zombie financials that are included in the listing.

[jtuck004]

6. I should ask. Why do you think it will reverse course? n/t

[Yavin4]

7. Because The Only Thing That Can Save This Economy Is Massive Govt Stimulus

And we won't get it because of the incoming Congress. Hence, deflation and a crashing S&P 500.

[Cali_Democrat]

9. If you really think it's going to fall that far....there are a few ways you could play it

1)Short stock (SPY) - The SPY is an ETF that tracks the S&P 500. It trades at exactly 1/10 the value of the index. You could short this and make a lot of money if you're correct. If you're wrong though, you will get blown out of the water if you're not careful.

2) E-mini futures - These are index futures contracts. You would short the index by selling the contracts. The index value falls and you make money. This could also blow up in your face big time though if the market goes up.

3) SPY put options - I find this to be the best play because your risk is predefined. Specifically something called a spread. There are a lot of different kinds of spreads. They basically help to reduce the cost of entering a position. Buying puts straight up can be expensive and if you're wrong, you lose all the money that you used to enter the position.

There is a lot of information about this online.

Google is your friend :)