Some new ETFs have become available over the past few years that provide investors an easy way to hedge without dancing with options, and to profit handsomely off of downward moves in the market. These are the ProShares UltraShort series. These ETFs are designed to provide a return equal to -2 times an index they track. So if the S&P500 goes down 5% for example, the UltraShort S&P500 will go up 10%. On extreme down days such as today during a period of heavy volatility, these funds are getting crazy single day returns. Here is a list of some of the UltraShort funds and their corollaries:
| Index | Long (% today) | UltraShort (% today) |
|---|
| S&P 500 | SPY(-5.45%) | SDS (+11.32%) |
| Nasdaq 100 | QQQQ (-2.76%) | QID (+5.58%) |
| FTSE China 25 | FXI (-10.72%) | FXP (+21.34%) |
| Dow 30 | DIA(-5.40%) | DXD (+10.31%) |
In times of less volatilty, these funds can be used as a hedge.
This article details some basic hedging techniques that such funds enable.
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