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I am now looking at some of the short and ultra-short ETFs as protection against a bear market. But I cannot get a handle on how these make money. Do they short the individual stocks in the index they track? And exactly how do the ultra-short ETFs try to double the return? -- E.W. The short and "ultra" (or "double") short ETFs (
About Shorting StocksInvestors sell stocks short when they believe the market will go lower. Instead of buying low and selling high, the short-seller does the reverse: He sells high, and then, after the market has fallen, buys low. Typically, when an investor shorts an individual stock, he or she needs to set up a
Short ETFsProShares Advisors and Rydex Securities are currently the only companies issuing exchange-traded funds that short the U.S. and foreign stock markets. These ETFs go up in price when the market goes down. Short ETFs, such as the ProShares Short S&P500 ( SH),
Press Your Bets With Leveraged ETFs