Mar. 17, 2020
Comment on SEC Proposed Rule #S7-24-15: I believe that inverse funds are necessary to the proper functioning of the market. As an individual investor it can be very challenging to hedge against market volatility. My personal experience is that options tend to miraculously expire worthless and shorting stocks often times ends in a brutal short squeeze and my short gets called away just prior to huge drops. Inverse ETF's provide a way to hedge my long positions by providing an opportunity to short a portion of my portfolio without worrying about short squeezes, short dividends etc. I invest inside and outside of my retirement accounts also, and the retirement accounts don't allow me to short, so It is difficult to hedge primarily long positions. Finally, I find it ironic that there would be any consideration given to eliminating short ETF's after a 10 year bull market run, unprecedented Fed fueled low interest rates and immense stock buybacks. This activity has squeezed a lot of shorts. When the market cannot be shorted effectively, the bubbles grow to dangerous proportions. I don't need the SEC to protect me from myself, I need the SEC to protect me from Market manipulation. The inverse ETF's are an important tool for individual investors. Regards, Gregory Valdovinos