This is an inverse leveraged ETF designed to track twice the opposite of the S&P 500's daily return. It uses derivatives to reflect short-term declines in the index at an amplified magnitude, and its exposure is reset on a daily basis.

It suits active traders who want to make a leveraged bet on short-term declines in the S&P 500 or hedge in the short term, and who are willing to accept high risk.

It is a passively managed (index-tracking) ETF operated by ProShares.

The fund builds its exposure with derivatives to track twice the opposite of the S&P 500's daily return, and it resets that exposure every day. Because of the daily reset structure, prolonged volatile markets produce a compounding effect in which cumulative returns diverge sharply from simply twice the opposite of the index.

• Tracks twice the opposite of the S&P 500's daily return
• Inverse leveraged structure reset every day

Assets under management (AUM) stand at $359.1M, and the total expense ratio is 0.91% per year.

Compared with SPY, which tracks the index directly, the main points of comparison are direction, leverage multiple, and volatility.

Inverse leveraged products reflect index moves in the opposite direction at an amplified scale, so they typically post large gains in falling markets and large losses in rising markets. Because the index tends to trend upward over the long term, the value of inverse products can erode sharply if they are held for long periods.

Fund flows into and out of inverse leveraged products vary widely with short-term bearish bets and hedging demand, and short-term trading and hedging money sometimes flows in when concerns about a market correction grow. It is also worth noting that performance differs greatly depending on the volatility environment.

Short-term bearish bets and hedging are both its strength and its risk, and the compounding effect of the daily reset, amplified losses in rising markets, and unsuitability for long-term holding are key considerations.

To track the index directly, direct alternatives include SPY for the S&P 500, and to bet against the index without leverage, one-times inverse products such as SPDN are also worth comparing. If you want a higher inverse leverage multiple, products such as SPXS can be considered as well. The three products shown in the table, SQQQ, SH, and SPXU, differ in underlying index and multiple: three-times inverse Nasdaq, and one-times and three-times inverse S&P, respectively. This ETF is distinguished by its inverse leveraged structure that tracks twice the opposite of the S&P 500's daily return.

These are the points to review before investing in SDS. Short-term bearish bets and hedging are appealing, but amplified losses in rising markets, the compounding effect, and unsuitability for long-term holding need to be checked in advance. It is best to approach the fund only after fully understanding the inverse leveraged structure.

Amplified losses when the index rises and the compounding effect of the daily reset are the main variables for performance, and because the index tends to trend upward over the long term, the value of inverse products erodes sharply when held for long periods. Inverse leveraged products are suitable only for short-term trading and hedging, and the risk of losing principal is high.

It is a suitable candidate for risk-tolerant traders who want to make a leveraged bet on short-term declines in the S&P 500 or hedge in the short term. If you want to track the index directly, choose a product such as SPY, and if you want a short-term bearish bet or hedge, it is advisable to choose this product only after fully understanding its structure.