Shorting Gold with JDST

Shorting Gold with inverse ETF JDST

Gold is very volatile and if you have an account that you can’t short gold you can use $JDST to buy when gold is going down.  Let’s take a look at the chart.  JDST is the Direxion Daily Jr Gld Mnrs Bear 3X ETF, this 300% of the inverse (or opposite) of the daily performance of the MVIS Global Junior Gold Miners Index. The fund invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse (opposite) or short leveraged exposure to the index equal to at least 80% of the fund’s net assets (plus borrowing for investment purposes). The index tracks the performance of foreign and domestic micro-, small- and mid-capitalization companies. The fund is non-diversified.  Shorting gold – This means that junior miners go down this moves up 3 times more according to Yahoo Finance.

When there is gold selling pressure, JDST move in the opposite direction.

The average true range over a three week period is $6.20.  This is a pretty large movement for day trading so you will have to monitor your position sizing for your risk parameters.

Shorting gold in other markets can be done through many different inverse ETF’s.  For the Gold trader JDST offers many advantages in size positioning and technical trading.

Lots of volatility here, be sure to adjust position sizing for the volatility, manage your risk first, don’t get in unless you see your risk, your targets and how to protect your capital.

If you would like to learn more about how to take advantage of this volatility sign up for our course.