FEATURED CONTENT

Bull or Bear Market… Doesn’t matter

Kyle Dennis’ new, 5 Min Strategy is poised to double Your Money Weekly!

Michael S. made 173% with Dollar Ace. So can you!

 

These new ETFs allow you to bet against retail stocks

Avatar ·

The backstory: It’s Black Friday again, a time when retail stocks could generate high revenues and earnings ahead of the holiday season. However, with Amazon.com (AMZN) and online retailers taking market share from brick-and-mortar retailers, stocks in the space could suffer during the busiest shopping time of the year.

If you’re thinking that brick-and-mortar retailers won’t meet expectations, and online retailers will outpace traditional retailers, keep an eye on the ProShares Decline of the Retail Store ETF (EMTY) and the ProShares Long Online/Short Stores ETF (CLIX).

What to know: EMTY is designed to benefit from a fall in brick-and-mortar retailers. With the convenience of e-commerce, online retailers are threatening to shift consumer habits, making many elements of physical shopping irrelevant. EMTY aims to provide the inverse of one times the daily return of the Solactive-ProShares Bricks-and-Mortar Retail Store Index. Since EMTY is an inverse ETF and only aims to provide returns corresponding to -1x its benchmark index, traders and investors need to be careful holding this ETF for periods longer than a day due to the compounding of daily returns.

CLIX aims for investment results corresponding to the performance of the ProShares Long Online/Short Stores Index. Again, with e-commerce sales growing at a fast pace and thwarting in-store retail, there is immense growth potential in the online retailers space. On the other hand physical retailers are under pressure, with revenues and earnings declining significantly.

How I’m playing it: If fewer consumers are working the Black Friday sales, these ETFs could see a strong rise. Additionally, if investors and traders start rotating from bricks and mortar stocks to e-commerce stocks, like AMZN and Alibaba (BABA), both CLIX and EMTY should benefit. However, I’m not jumping the gun ahead; I’ll wait for Black Friday results and look for a negative catalyst for traditional retailers before hopping in.

#-#-#

Petra Hess runs PPetraPicks.com. She is a technical swing trader and long-term investor in domestic and Canadian stocks and ETFs. At the time this article was published on RagingBull.com, she had no ahares, options or open orders in CLIX, EMTY, AMZN or BABA.

You may also like

Exclusive System Tracks Wall St. Insiders

“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)

“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day

After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)

RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service

“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles
START NOW