Exploring the Benefits and Risks of Inverse ETFs - Deepstash

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Exploring the Benefits and Risks of Inverse ETFs

investopedia.com

What Is an Inverse ETF?

An inverse ETF is an exchange traded fund (ETF) constructed by using various derivatives to profit from a decline in the value of an underlying benchmark. Investing in inve...

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Key Takeaways

  • An inverse ETF is an exchange traded fund (ETF) constructed by using various derivatives to profit from a decline in the value of an underlying benchmark.
  • Inverse ETFs allow investors to make money when the market or the underlying index declines, but without having to sell anything...

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Understanding Inverse ETFs

Many inverse ETFs utilize daily futures contracts to produce their returns. A futures contract is a contract to buy or sell an asset or security at a set time and price. Futures allow investors to make a bet on the direction o...

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Inverse ETFs vs. Short Selling

An advantage of inverse ETFs is that they do not require the investor to hold a margin account as would be the case for investors looking to enter into short positions

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