Wednesday, December 29, 2010

Short ETF

A short ETF is an exchange traded fund that aims to deliver the inverse or opposite performance of a particular stock, bond, or commodity index - or an individual asset or security such as a currency. The main job of a short ETF is to duplicated the opposite of the daily returns of the underlying security or index, with some short ETFs also being leveraged to magnify the effect e.g. "double short", "triple short". Short ETFs can be a smart way of capturing downside movements on securities that investors have a particular view on. They may also offer somewhat of a hedge.

Synonyms: Bear ETF, Leveraged ETF, Bear fund

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