The wild market swings of late are most likely down to hedge funds says Keith Fitz-Gerald. These big money movers are liquidating assets to meet margin calls, causing chaos in the markets. Keith has four tips on how to dodge the worst of the damage.

He says it is essential to guard against today’s downside risks with trailing stops, inverse ETFs, and put options.

And every investor should have a plan to re-engage with the markets when this financial storm passes.

This from Money Morning:

As the worst financial crisis in recorded market history rocks Wall Street, millions of investors on Main Street keep asking a single question.

When will this end?

The market volatility is unprecedented: Where professional traders once ranked a day as “wild” if we witnessed a 300-point swing, in recent months we’ve seen 600- and 700-point swings on a regular basis. On Oct. 9, a Thursday, we rode out a

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Trading has reopened on the ProShares Short Financials (AMEX: SEF) and ProShares UltraShort Financials (AMEX: SKF) ETFs, after being halted this morning as part of the fallout from the SEC's ban on short-selling in Financial stocks.

See our earlier story on the topic here.

The two ETFs are not functioning normally, however: ProShares has banned "creations" until further notice, meaning that no new shares can be created to fill demand if it materializes. Shares can, however, be redeemed as usual by Authorized Participants.  

What does this mean for the average investor?

ProShares warned in a statement that "the shares of these ProShares ... may trade at prices that are not in line with their intraday indicative values."

In other words, the price of the shares may not match the expected returns: -200% of the daily movmenet of the Dow Jones Finanical Index for SKF, and -100% of the daily movement for SEF.

At

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[Expanded with quotes from Michael Sapir, CEO of ProShares.]

Trading has reopened on the ProShares Short Financials (AMEX: SEF) and ProShares UltraShort Financials (AMEX: SKF) ETFs, after being halted this morning as part of the fallout from the SEC's ban on short-selling in Financial stocks.

See our earlier story on the topic here.

The two ETFs are not functioning normally, however: ProShares has banned "creations" until further notice, meaning that no new shares can be created to fill demand. Shares can, however, be redeemed as usual by Authorized Participants.  

What does this mean for the average investor?

It depends. Importantly, investors can still buy and sell the shares of both funds; in fact, more than 10 million shares of SKF have traded today, with high liquidity and tight spreads.

However, ProShares has warned in a statement that "these ProShares ... may trade at prices that are not in line with

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Trying to make sense of it all?  Don't.  Like we've said before, When in doubt just Buy the SKF.  The good ol' ProShares UltraShort Financials (AMEX:SKF), it wins every time. NEW YORK (AP) -- Stocks sank in thin trading Monday as worries about the credit ratings of American International Group Inc. weighed on the financial sector. The major indexes each fell about 2 percent, including the Dow Jones industrial average, which was off about 250 points. Bond prices jumped as investors fled to the safety of government ...