PSQ 1x Short
ProShares Short QQQ
Shorts: NASDAQ-100 (QQQ)
Expense Ratio
0.95%
Leverage
1x Inverse
Issuer
ProShares
Inception
Jun 2006
PSQ ETF Fact Check
| What it is | PSQ is ProShares Short QQQ, an inverse ETF tied to NASDAQ-100 (QQQ). |
|---|---|
| Daily target | 1x Inverse exposure before fees, expenses, tracking error, and daily compounding effects. |
| Cost check | Expense ratio shown here: 0.95%. Verify the latest fee, holdings, and prospectus on the issuer page before trading. |
| Holding-period check | Even 1x inverse ETFs reset daily, so longer holding periods can diverge from the simple inverse index move. |
Source checks: ProShares ETF pages for current fund documents and the SEC/FINRA leveraged and inverse ETF bulletin for daily reset risk. Inception shown here: Jun 2006.
Inverse ETF Risk
PSQ is an inverse ETF designed for short-term hedging and trading. It resets daily and may not track the inverse of its index over longer periods.
What PSQ Shorts
The ProShares Short QQQ (PSQ) ETF is designed to deliver the inverse (opposite) of the daily performance of the NASDAQ-100 Index. This index is heavily weighted toward large-cap technology and growth stocks, tracked by the popular Invesco QQQ Trust (QQQ).
PSQ achieves this inverse exposure through short positions in derivatives like swaps and futures contracts linked to the NASDAQ-100. It is rebalanced daily to target a -1x return of the index's daily movement.
Key Risks
- Daily Holding Risk: Designed for daily results only. Holding longer can cause returns to diverge significantly from the inverse of the index's cumulative return.
- Compounding Risk: Daily rebalancing in volatile markets can lead to compounded losses or eroded gains over time.
- High Expense Ratio: At 0.95%, the cost is high for an index ETF and can significantly drag on returns.
- Counterparty Risk: Relies on derivatives contracts with other financial institutions, exposing investors to potential default.
- Market Direction Risk: If the NASDAQ-100 rises, PSQ will lose value. It is a tactical tool, not a long-term investment.
Best Use Cases
- Short-Term Hedging: Used by investors to temporarily hedge an existing long portfolio against a potential downturn in tech/growth stocks.
- Tactical Bearish Bet: For sophisticated traders with a strong short-term conviction that the NASDAQ-100 will decline.
- Portfolio Diversification: To provide a measure of negative correlation to tech-heavy portfolios during market stress, though it is not a set-and-forget solution.