An inverse, or "short", exchange traded fund (ETF) provides the opposite performance of the benchmark it tracks. For example, if the S&P 500 rises 1%, then the inverse ETF should fall by 1%; if the S&P 500 falls 1% than the inverse ETF will rise 1%.

A leveraged inverse ETF seeks to provide a multiple of the opposite performance to the benchmark.  So if the S&P 500 rises 1%, the leveraged inverse ETF should fall 2%, and so on.

Seeking Alpha provides a current list of inverse ETFs, as well as explain some of their characteristics.  Inverse and inverse-leveraged ETFs have tax advantages over shorting stocks but they do carry higher expense ratios than standard index ETFs.  Some reasons to short an index include:

• A long-term investor believes the market will fall, and wants protection during a market decline;
• A long-term investor believes the market will fall and has a large unrealized capital gain they don’t want to realize;
• A short-term trader wants to make a bearish bet on the market.