This is an inverse leveraged ETF designed to track three times 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 leveraged bets on short-term declines in the S&P 500 or seek a short-term hedge, and who are willing to accept very high risk.

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

The fund builds its exposure with derivatives to track three times the opposite of the S&P 500's daily return, and it resets that exposure every day. Because of this daily reset structure, a prolonged period of high volatility produces a compounding effect, causing cumulative returns to diverge significantly from simply three times the inverse of the index.

• Tracks three times the opposite of the S&P 500's daily return
• Inverse leveraged structure that resets every day

Assets under management (AUM) are $405.0M, and the Expense Ratio is 0.90% 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 show large gains in falling markets and large losses in rising markets. Because the index has tended to rise over the long term, the value of inverse products can erode significantly when they are held for long periods.

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

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

For direct exposure to the index itself, alternatives include SPY, which tracks the S&P 500, and among other inverse leveraged products in the same direction, SPXS is also a comparison candidate. To bet against the index without leverage, you could also consider a one-times inverse product such as SPDN. The three products shown in the table, SQQQ, SH, and SDS, differ in underlying index and multiple: they are, respectively, a three-times inverse Nasdaq product and one-times and two-times inverse S&P products. What differentiates this ETF is its inverse leveraged structure, which tracks three times the daily opposite of the S&P 500.

Here are the points to review before investing in SPXU. Short-term bearish bets and hedging are attractive, but amplified losses in rising markets, the compounding effect, and unsuitability for the long term should be confirmed 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 from the daily reset are the main variables for performance, and because the index has tended to rise over the long term, the value of inverse products erodes significantly 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.

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