BZ Chart Of The Day: An ETF For The Recession

BZ Chart Of The Day: An ETF For The Recession

Oil has been in a freefall. The ProShares UltraShort Bloomberg Crude Oil ETF SCO has been skyrocketing. And if oil keeps dropping, SCO will move even higher.

This ETF is designed to move in the opposite direction of oil. It also uses leverage. It will move by about twice as much on a percentage basis.

For example, if oil falls by 2%, SCO should gain about 4%. If oil drops by 3%, SCO should rise by about 6% and so on.

The recent moves lower in oil and copper could be an ominous warning. They could be a sign of diminished demand, and this could be a sign that the recession is already here.

To learn more about trading, check out the new Benzinga Trading School.

Photo via Shutterstock.

Posted In: Specialty ETFsTechnicalsCommoditiesMarketsTrading IdeasETFs