| A short exchange-traded fund (ETF) is designed to profit from a decline in the value of the underlying index. A short ETF gets its name from the fact that it is designed to benefit in the same manner as a short position in an underlying index. Thus, a short ETF will be profitable if the underlying index or asset declines in price, and will incur a loss if the underlying index or asset gains in price.
Short ETFs can be used for speculation or hedging.Short ETFs are widely known as “inverse ETFs”, and sometimes as “bear ETFs.” Short ETFs are not constructed through short positions in the constituents of an index, but rather, through the use of derivative instruments like options, futures and swaps...............................................Full Article: Source
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