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The pandemic has introduced a new wave of investors. Some are in it for the thrills, some for the long haul, while others want to trade tactically. The latter are in luck as traders now have more tools than ever before. Hence, these market participants can express conviction not just during bull runs, but also during market downfalls – all without having to deal with a margin account.
What is short selling?
It involves:
If the price falls indeed, the trader can buy back at a lower price, return the borrowed shares to the broker, and pocket the difference as profit.
Requirements
Traditional short selling can only be done via a margin account.This means:
Additionally, the investors must abide by the brokers’ equity requirements to maintain their short position open. Other alternatives like using options, futures, and structured products come with their fair share of risks and complexities.
Going Short Using ETPs
The advent of exchange-traded products has allowed investors to go short by being long (pun intended). By purchasing inverse ETPs, investors can get short exposures to a wide array of securities. These include single stocks, broad market ETFs, sectors, and even thematic ETFs.
How do they work?
Inverse ETPs aim to offer daily inverse exposure – hence, if a particular instrument falls by 1% on a certain day, the inverse tracker is expected to gain on that day. The exact amount will depend on the leverage factor and fees involved.
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at
What are some key differences between inverse ETPs and short selling?
Inverse ETPs are rebalanced on a daily basis. This means the inverse exposure is provided for that particular day. Holding for longer periods may lead to compounding – something that can benefit investors in trending markets and hurt them in choppy ones.
Key Benefits
The main advantage of inverse ETPs is they allow investors to quickly and easily benefit from falling asset prices. Assuming an investor pays for the position outright (no leverage), their loss is also capped at the amount invested, since the price of the ETF can’t drop below zero.
*FINRA minimum
Key Risks
Due to daily rebalancing, holding periods longer than 1 day and higher leverage factors can lead to a divergence of ETP performance vs what an uninformed investor might expect. Please read the full risk disclosure in Leverage Shares’ Prospectus.
Inverse ETP Quirks
I. With short selling, your max profit is 100%. With inverse ETPs, continued declines in the underlying instrument can lead to inverse ETP performance of >100%.
II. During choppy markets, inverse ETPs may not perform as expected. The below scenario shows that although the underlying instrument lost 5% over a 10-day period, so did the Inverse ETP.
How can I buy inverse ETPs?
You can check out the full range of short and leveraged ETPs by Leverage Shares.
These can be traded like any other stock or ETF via a normal brokerage account.
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
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This is a marketing communication. Please refer to the Prospectus of the ETPs and to the KIID before making any final investment decisions.
This information originates from Investium Limited, which has been appointed as distributor of Leverage Shares products in Europe by Leverage Shares Management Company Limited (the “Arranger”). Investium Limited with registered address at 6 Nikou Georgiou Street, Office 302, 1095 Nicosia Cyprus, is a financial services provider regulated by the Cyprus Securities and Exchange Commission (CySEC).
The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. Investium Limited and the Arranger (together referred as “Leverage Shares”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of Leverage Shares. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Leverage Shares.
© Leverage Shares 2025
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This website is accessible to retail investors in the EU for informational purposes only. Leverage Shares does not directly distribute to retail investors. Retail clients should not rely on any of the information provided and should seek independent financial advice.
Information contained in this website is intended only to provide general and preliminary information and does not constitute any legal or investment advice, an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
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Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
Information contained in this website is intended only to provide general and preliminary information to EU regulated firms such as Investment Intermediaries and Asset Managers. This information does not constitute an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
This website is accessible to retail investors in the UK for informational purposes only. Leverage Shares does not directly distribute to retail investors. Retail clients should not rely on any of the information provided and should seek assistance from an IFA for all investment guidance and advice.
Information contained in this website is intended only to provide general and preliminary information and does not constitute any legal or investment advice, an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
Please confirm the Terms and Conditions by clicking on “I agree”.
This website is for informational purposes only.
Information contained in this website is intended only to provide general and preliminary information to FCA regulated firms such as Independent Financial Advisors (IFAs) and Wealth Managers. This information does not constitute an offer to sell or solicitation to buy any security, including shares of any Exchange Traded Products (“ETPs”).
An investment in the promoted ETPs may only be made based on the ETPs´ legal documentation and will be subject to terms and conditions contained therein.
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions. The ETPs shown on this website are not available for sale in the U.S. or to a U.S. person.
I acknowledge having my legal residence in the selected location.
This website is intended for U.S. residents.
The content on this website is for informational purposes only and is educational in nature.
The material contained on this website is not intended as a recommendation to buy, sell or hold any security or to adopt any investment strategy.
This website is intended for U.S. residents.
The content on this website is for informational purposes only and is educational in nature.
The material contained on this website is not intended as a recommendation to buy, sell or hold any security or to adopt any investment strategy.
