Inverse ETF

An exchange-traded fund designed to deliver the opposite return of its benchmark index on a daily basis. If the S&P 500 falls 1%, an inverse S&P 500 ETF aims to rise 1%. Leveraged inverse ETFs amplify this effect to 2x or 3x. Because these products reset daily, compounding effects can cause significant tracking error over longer periods, making them unsuitable as long-term holdings. They are primarily used by short-term traders seeking to profit from or hedge against market declines.