An ETF To Buy For The Super Bears

Retail investors can use ETFs to make significant profits when the stock market declines. One is the ProShares UltraPro Short QQQ ETF SQQQ. It's designed to trade three times inversely to the Invesco QQQ ETF QQQ, which tracks the NASDAQ 100 Index.

If QQQs were to drop by 1%, SQQQ should gain about 3%. If the QQQs were down by 2%, SQQQ should be up by about 3%, and so on.

Inverse ETFs allow retail traders to profit when the market heads lower and the leverage that the ETF uses can result in significant prices.

But investors should exercise caution. Leverage can enhance gains, but if things go the wrong way it can do the same to losses.

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Posted In: Sector ETFsSpecialty ETFsETFs