Inverse ETF Options for Short Term Swing Traders: 7 ETFs You Need to Know for Friday

If you are trading or investing in exchange-traded funds in an IRA or otherwise restricted account, then today’s 7 ETFs You Need to Know is especially for you.

Today’s 7 ETFs You Need to Know focuses on the inverses of some of the major equity exchange-traded funds. Inverses of ETFS representing markets like the S&P 500 or the Nasdaq 100 are vital for traders looking to hedge or take positions against the market, without having to actually sell stocks or ETFs short.

Here are 7 ETFs You Need to Know.

For the most widely-traded exchange-traded fund, the SPY, one of the most popular inverse ETFs to trade is the ^SH^. SH tracks the daily inverse of the S&P 500 on a one to one basis.

SH has closed lower for four out of the past five trading days.

Traders who want to add a little leveraged to their inverse trading in the SPY may want to consider the ^SDS^ (below).

SDS chart

Like SH, SDS has closed lower for four out of the past five sessions. SDS is inverse leveraged two-to-one to the daily returns of the S&P 500.

The major inverses of the Nasdaq 100 is the ^PSQ^ and the ^QID^. PSQ is non-leveraged, while QID is leveraged (200%).

There are a number of options for traders looking to take the other side of the bull market in oil and gas stocks. One of the more popular is by way of the ^DUG^ (below).

DUG chart

Inverse leveraged 2-to-1 to the Dow Jones U.S. Oil & Gas Index, DUG has gained for the past two days in a row.

Traders looking to hedge or bet against technology in the short term have ETFs like the ^REW^ (below).

REW chart

Shares of REW pulled back by more than 1% in trading on Thursday, closing lower for the fourth session out of the past five. REW is inverse leveraged to the Dow Jones Technology Index on a 2-to-1 basis.

Given recent weakness in financials, a growing number of traders are considering ways to participate in any further downside. One popular option is the ^SKF^. Inverse leveraged two-to-one to the Dow Jones U.S. Financial Index, SKF has been essentially rangebound for the past week – though with a recent bias toward the overbought.

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David Penn is Editor in Chief of