Inverse ETFs, Inverse Mutual Funds, and Inverse ETNs

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September 24, 2007

So you’re tired of always being long and want to short the market?

How do you do it without borrowing shares? Easily. You buy the appropriate vehicles long. Which is actually a bet that the market will go down. Let me explain. There are investment options that you can buy long that represent an investment that their benchmark will go down. Its the same results as shorting except with traditional shorting you are borrowing shares that you don’t own.

There are 1x, 1.5x, and 2x leveraged ETFs, Funds, or ETNs that you can use to trade. I only trade 2x leveraged funds/etfs.

Inverse Market ETFs

1x Beta Inverse ETFs

1. PSQ – 1x inverse the Nasdaq 100.
2. SH – 1x inverse the S&P 500.
3. MYY – 1x inverse the MidCap Index.
4. DOG – 1x inverse the Dow 30.
5. RWM – 1x inverse the Russell2000.
6. SBB – 1x inverse the SmallCap 600.

2x Beta Double Inverse ETFs

Theoretically these investment vehicles produce twice the gain/loss of their benchmark. The price between the index and the etf does not always equal a double – speaking from experience.

1. QID – 2x double inverse the Nasdaq 100 ie this is a short the Nasdaq ETF.
2. SDS – 2x double inverse the S&p 500 ie this is a short the S&P 500 ETF.
3. MZZ – 2x double inverse the MidCap 400.
4. DXD – 2x double inverse the Dow 30..
5. TWM – 2x double inverse the TWM ie this is a short the Russell 2000 ETF.
6. SDD – 2x double inverse the SDD

Inverse Mutual Funds

The following companies offer inverse mutual funds.

Rydex Investments

1. RYSHX – 1x inverse Russell 2000 mutual fund
2. RYIRX – 2x inverse Russell 2000 mutual fund

3. RYCWX – 2x inverse the Dow 30 Index.

4. RYAIX – 1x inverse the Nasdaq 100 Index.
5. RYVNX – 2x inverse the Nasdaq 100 Index.

6. RYURX – 1x inverse the S&P 500 Index.
7. RYTPX – 2x inverse the S&P 500 Index.

ProFunds

1. SHPIX – 1x inverse the Russell 2000 Index.
2. UCPIX – 2x inverse the Russell 2000.

3. BRPIX – 1x inverse the S&P 500.
4. URPIX – 2x inverse the S&P 500.

5. UWPIX – 2x inverse the Dow 30.

6. SOPIX – 1x inverse the Nasdaq 100.
7. USPIX – 2x inverse the Nasdaq 100.

Direxion Funds

1. DXQSX – 2.5x inverse the Nasdaq 100.

2. PSPSX – 1x inverse the S&P 500.

3. DXSSX – 2.5x inverse the S&P 500.

4. DXRSX – 2.5x inverse the Russell 2000.

Inverse Sector ETFs

SKF – 2x Inverse Financials – essentially this is the leveraged opposite version of XLF
SRS – 2x Inverse Real Estate – essentially this is the leveraged opposite version of IYR
REW – 2x Inverse Semiconductors – essentially this is the leveraged opposite version of SMH
SMN – 2x Inverse Basic Materials Index – essentially this is the leveraged opposite version of XLB
FXP – 2x Inverse China 30
EFU – 2x Inverse MSCI Index
SDP – 2x Inverse Utilities
SZK – 2x Inverse Consumer Goods
SCC – 2x Inverse Consumer Services
RXD – 2x Inverse Health Care
SIJ – 2x Inverse Industrials

Inverse Commodities ETNs

DGZ – 1x Inverse Gold index – opposite of GLD
DZZ – 2x Double inverse Gold index – essentially this is the leveraged opposite version of GLD

DDP – 1x Inverse Deutsche Bank Commodity Index
DEE – 2x Double inverse Deutsche Bank Liquid Commodity Total Return Index.

DTO – 2x inverse Deutsche Bank Liquid Commodity index – Optimum Yield Oil Excess Return

BOM – 2x inverse Deutsche Bank Liquid Commodity index – Optimum Yield Industrial Metals Excess Return

Inverse Currency ETNs

UDN – Double inverse US dollar – if you want to short the US Dollar
DRR – Van Eck Double inverse Euro
EUO – 2x inverse Euro ETN