Double Short ProShares ETFs: Volatility Goes Both Ways

 |  Includes: EEV, EWV, FXP, SCC, SDP, SJH, SKF, SMN, SRS
by: Bespoke Investment Group

Throughout the current bear market, many of the ProShares' Double Short ETFs have been big winners, and the increase in their trading volumes is evidence that traders love them for their volatility and how easy it is to effectively go short while staying long.  Since the July lows, however, many of these ETFs are down big, highlighting that volatility can go both ways.  As shown below, the Ultrashort Financials ETFs (NYSEARCA:SKF) is down 35% since July 15th, but it is still up 32.6% year to date.  The Ultrashort Russell 2,000 Value ETF (NYSEARCA:SJH) is down the second most at -23.6%, followed by Ultrashort Real Estate (NYSEARCA:SRS) and Ultrashort Consumer Services (NYSEARCA:SCC).  Some of the Ultrashorts are up since mid July, however, including Utilities (NYSEARCA:SDP), Materials (NYSEARCA:SMN), Japan (NYSEARCA:EWV), China (NYSEARCA:FXP), and Emerging Markets (NYSEARCA:EEV). 

There's no doubt that Ultrashorts are great for investors with a strong negative opinion on an asset class, but it sure makes being wrong hurt ultra bad.