With the market and ETFs acting as crazy as they are, you may want to consider some alternate ETF Investing strategies. One strategy that may be a fit for your portfolio is to trade some ETF options.

There are a few different plays you can make with ETF options. For example, if you want to make a directional play (upside or downside) in order to hedge some ETF risk or gain some short-term exposure, you can purchase calls or sell puts to get long, or buy puts or sells calls to get short. There are different advantages and disadvantages when you sell or buy an option.

Another "option" is to use ETF options to make a volatility play on certain ETFs. If you think a particular ETF is going to move around a lot for the next few months, you can buy a straddle to take advantage of that volatility. If you think a certain ETF is awaiting certain news and won't make a move until that news is announced, you can sell volatility by shorting an option straddle in an ETF. Keep in mind that trading option straddles is an advanced investing strategy and you should be very careful when including this in your portfolio.

ETF options are time-products, meaning they expire. If it is November and you buy a December option. The position you take will disappear on the third Friday of December. So if you have a "time play" you want to make on an ETF, using options might be a good way to achieve your goal

For more detailed information on trading ETF options, please see some of my option articles on the ETF site. Good Luck!

Four Basic ETF Option Trading Strategies

Trading ETF Option Straddles

It was the worst holiday season for the retail sector in the last 40 years. That's a lot of Christmases ago. Retail sales were down 2.7% in December capping off a tough year for the market. And a tough year for retail ETFs. The SPDR S&P Retail ETF (XRT) has been down 18.5% over the past three months. Yeah, it's ugly.

Indicators aren't predicting things will turn around anytime soon, either. With less profits, companies are laying off employees. People have less disposable income. People are defaulting on mortgage payments. Financial Companies are losing money and laying off employees... It's a vicious cycle right now.

Hopefully changes like rate cuts will help, but in the meantime there is not a lot of upside for retail ETFs.

Is it time to refinance your home yet? With the rates as low as they are, it might be. Things are even better for new home buyers. Or at least that's what the Fed is hoping.

With rates lower, the theory is that more people will borrow money for things like new home mortgages. That's the theory anyway. The results have not been astounding as of yet, but if rates stay this low or continue lower, then maybe home sales will increase. If that's the case, Housing ETFs could reap the benefits.

If you want to keep an eye on some of the Housing Industry ETFs, here are three more popular funds to track.

These ETFs as well as a lot of other Housing ETFs took a beating in 2008, but hopefully with these new low rates, things will turn around in 2009 for the funds.

Direxion is launching two new Index ETFS which will track the performance of the Russell Mid-Cap Index. However they will not be tracking the index in the same way.

The Direxion Mid-Cap Bull 3x Shares (MWJ) will move in the same direction of the index, seeking an estimated 300% of the moves within. On the flip side, the Direxion Mid-Cap Bear 3x Shares (MWN) will be looking to move in the opposite direction of it's brother ETF and the Russell Mid-Cap Index, but still seek the same 300% movement rate.

The equities in the ETF will consist of companies with an average market cap of $5.2 billion and will give investors the opportunity to play or hedge the volatile swings in the current market. Upside and downside. However, as with any investment, the new ETFs should be thoroughly researched to see if they are a fit for your investment portfolio or strategy.