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


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  • Bob

    Is BearX a reverse ETF???

  • http://www.gmas-ellie.com/ ellie

    I liked your lists, thanks.
    Your page goes very slow up and down, try to give the size of
    your images on the page, so the computer does not have to
    figure it out.

  • JJ

    Hi all:

    Could anyone please tell me where I can buy these Inverse ETFs… What are minimum lot size? TIA

    JJ

  • http://www.stockrake.com StockRake

    Any lot size. You can buy one share and you can buy them at any broker.

  • http://whisperfromwallstreet.com penny stocks

    I like your list, thanks for posting.

    One good advise that some of you might have known already but might find useful for others is you need to do your research before making your commitment. I also suggest not to put all of your money in one basket. Before you start, make sure you have enough money to support and continue what you've started. If you're not ready, just wait.

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    Check out the daily picks and some interesting facts and don't forget to signup for advice.

  • stevesueng

    Interesting site.

    You say, “I only trade 2x leveraged funds/etfs.”

    Why is that, do you think that's a way to hold down your expenses ? What's the longest you've held one of these short the market etf's? Do you wait for a big down day and sell before the close?

    I have the same sense that expressed in your July 6, 2009 post that, “Short signals developing on everything that didn’t have them as of last week.” I just don't know how to take advantage of this.

  • http://www.stockrake.com StockRake

    Steve,
    -At the time of this posting I said I only trade 2x funds/etfs. However, I do trade 3x etf's as well since their introduction came after this post.

    -The reason why I trade them is because of the added juice/leverage compared to 1x beta index trading vehicles.

    I've been trading Rydex funds since their inception which is around 2000-2001 I can't remember exactly. Way before the 2x etf's from ProShares came about.

    -I've been building different market timing models (systems) since the same time I started trading Rydex funds. Rydex has no fees for trades, but the catch is that you have limited trading windows of 10:30 and 3:55. So if the market makes a big break at 1PM and you want to sell
    you have to eat the loss and wait until 3:55 which then gets filled at 4pm. However, if you are swinging for the big long trends, these time restrictions don't really matter, but in shorter swings they matter. You have to have great timing, and that is something I am always working on.

    -When I made that post on July 6th, it was basically saying I'm seeing a turn in my signals. The signals I'm always working on. I don't really post about them that often, I just post my trades.

    ***The ETFs/Funds are not the best thing to trade, but I don't have experience with futures, which are a better vehicle to trade these indexes. The reason futs are better are because these leveraged etfs/funds have a decay factor.

  • stevesueng

    Thanks for the response.

    I'm going to review your archives and start following your posts. (Currently I'm parked in Ginnie Maes so, obviously, I'm not much of a trader. However, having missed participating in this last rally I feel like I have to come up with some investment strategy other than buying and holding onto mutual funds.)

  • bellini

    I am new to this business. Money and experience in real estate development. Have sincere feelings about the banking and real estate sectors. Where do I learn to capitolize?

  • http://www.stockrake.com StockRake

    The IYR is “the real estate” 1x beta etf.
    The banking 1x etf is a bank etf, but the XLF is the main financials etf.

    I can only speak about technicals as that is what I use to make most of my decisions. If you want to learn technical analysis, I would start with some books.

    TA will help you learn when to buy and sell at optimum times, and its not a guarantee to work. Some people hate it.

  • http://www.stockrake.com StockRake

    The IYR is “the real estate” 1x beta etf.
    The banking 1x etf is a bank etf, but the XLF is the main financials etf.

    I can only speak about technicals as that is what I use to make most of my decisions. If you want to learn technical analysis, I would start with some books.

    TA will help you learn when to buy and sell at optimum times, and its not a guarantee to work. Some people hate it.

  • http://www.financialspreadbettingsystem.co.uk financial spread betting

    I didn't have a problem, may be your internet connection?

  • wfs

    What do you mean by decay factor?

  • Russswanson

    Im trying to locate a list of Indexes, to be more specific I am looking for the Long and short version of the same Index. Can someone help me locate a site or link. Thank you. Rus

  • Agingbiker

    Another spin on the 1x inverse etf is HDGE

  • http://www.manhattansgreatest.blogspot.com/ Dennis The Menace

    Interesting list of unusual funds.

  • Tom

    Why can’t they trade the nasdaq instead of the nas-100?