SDS 2x Short
ProShares UltraShort S&P500
Shorts: S&P 500 (SPY)
Expense Ratio
0.89%
Leverage
2x Inverse
Issuer
ProShares
Inception
Jul 2006
SDS ETF Quick Answer
SDS is the ProShares UltraShort S&P500 ETF. It targets two times the inverse (-2x) of the S&P 500 for one trading day, before fees and expenses. It sits between SH (-1x) and SPXU/SPXS (-3x) in leverage.
Next step: use the S&P 500 short ETF calculator, then verify current NAV, market price, holdings, distributions, and expenses on the official ProShares SDS page.
S&P 500 Short ETFs Compared
| Ticker | Daily Target | Best fit | Main caveat |
|---|---|---|---|
| SH | -1x S&P 500 | Lower-leverage hedge against broad-market downside. | Still resets daily and can drift over multi-day periods. |
| SDS | -2x S&P 500 | Intermediate leverage for active bearish S&P 500 trades. | Losses compound faster if the S&P 500 rises. |
| SPXU | -3x S&P 500 | Aggressive one-day short S&P 500 exposure. | Higher decay and volatility than SDS. |
| SPXS | -3x S&P 500 | Direxion alternative to SPXU. | Compare issuer, spread, liquidity, and expenses before trading. |
High Risk Leveraged Product
SDS 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 SDS Shorts
The ProShares UltraShort S&P500 (SDS) is designed to deliver -2x the daily return of the S&P 500 Index. It provides a leveraged inverse exposure to the broad U.S. large-cap stock market.
It achieves this objective through the use of financial derivatives like futures, swaps, and options. It is rebalanced daily to maintain its -2x leverage factor relative to its underlying benchmark.
Official Source Checks
- Objective: ProShares describes SDS as targeting two times the inverse (-2x) of the daily performance of the S&P 500 before fees and expenses.
- Costs: Confirm the current gross and net expense ratios on the official SDS page or summary prospectus; this page currently shows 0.89%.
- Execution: Before trading, check market price versus NAV, premium/discount, bid-ask spread, options availability, and whether current holdings are swaps, futures, or cash instruments.
Key Risks
- Compounding Risk: Daily reset of leverage causes returns to diverge from 2x the inverse of the S&P 500's return over periods longer than one day.
- High Expense Ratio: The 0.89% fee is high for an index fund and erodes returns over time.
- Leverage Risk: Amplifies losses if the market moves against the position; potential for significant losses.
- Short-Term Holding: Designed for daily trading, not as a long-term buy-and-hold investment.
- Counter-Trend Risk: Betting against the long-term upward trend of the equity market is historically risky.
Best Use Cases
- Sophisticated short-term hedging for a portfolio heavily exposed to U.S. large-cap stocks.
- Active traders seeking to profit from an anticipated short-term decline in the S&P 500.
- Implementing a tactical, bearish market view for a single day or a few days.
- Potentially pairing with long positions to create a market-neutral strategy for a brief period.