What are "Ultrashort ETFs"?

EthanR answered 11 months ago …

Ultrashort ETF's are funds that are weighted to reflect performance that is inversely twice that of a particular index or sector. For example, QID is the ultrashort ETF that is inversely correlated to the performance of the Nasdaq 100. When the Nasdaq 100 is down 1%, QID will go up 2%. When the Nasdaq 100 is up 1%, QID will fall 2%.

These are great trading vehicles when a sector or index of the market is overbought, or just acting weak. One can make a lot of money very quickly. But they are highly volatile and not for the faint of heart. Set tight stops or you could find yourself with big losses if you are on the wrong side of a trade.