PST
2x Short
ProShares UltraShort 7-10 Year Treasury
Shorts: Mid Treasuries (IEF)
Expense Ratio
0.95%
Leverage
2x Inverse
Issuer
ProShares
Inception
Jun 2007
High Risk Leveraged Product
PST is a 2x leveraged inverse ETF designed for short-term trading only. Daily rebalancing causes significant decay over time. NOT suitable for buy-and-hold investors.
What PST Shorts
The ProShares UltraShort 7-10 Year Treasury (PST) seeks daily investment results that correspond to twice the inverse (-2x) of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index.
This ETF effectively shorts intermediate-term U.S. Treasury bonds, primarily those tracked by the iShares 7-10 Year Treasury Bond ETF (IEF). It uses derivatives like swaps and futures to achieve its leveraged inverse exposure.
Key Risks
- Compounding Risk: Daily reset can cause performance to diverge significantly from twice the inverse of the index's return over longer periods.
- Interest Rate Risk: If Treasury prices rise (yields fall), PST will lose value.
- High Expense Ratio: The 0.95% fee is high and can erode returns.
- Leverage Risk: Amplifies both gains and losses, increasing volatility.
- Counterparty Risk: Relies on derivatives contracts with other financial institutions.
Best Use Cases
- Tactical Hedge: For investors seeking to hedge a portfolio against a sharp rise in intermediate-term interest rates.
- Short-Term Speculation: For experienced traders making short-term, directional bets on falling Treasury prices.
- Portfolio Diversification: As a small, tactical allocation for sophisticated investors expecting a bond bear market.
Similar Instruments
Frequently Asked Questions
What does PST short?
PST provides -2x daily exposure to the ICE U.S. Treasury 7-10 Year Bond Index, meaning it profits when the prices of those intermediate-term Treasury bonds fall.
Is PST a long-term holding?
No. Due to daily leverage reset and compounding effects, PST is designed for short-term trading (ideally daily) and is generally unsuitable as a long-term investment.
What is the main risk of PST?
The primary risk is that if intermediate-term Treasury prices increase, PST will lose value. Its leveraged structure magnifies these losses, especially if held during a bond rally.