Still, XBI is one the most heavily shorted ETFs and it would take traders nearly six days to cover their bearish bets on IBB. [The Hated Biotech Rally]
Traders are not just shorting plain vanilla ETFs, they are establishing long positions in inverse leveraged funds. For example, the UltraShort S&P500 ProShares (NYSEArca: SDS) a double-leveraged, inverse play against the S&P 500, and the ProShares UltraPro Short QQQ (NasdaqGS: SQQQ), have taken in almost $420 million combined in the current quarter.
Equities are not the only asset class where shorts are struggling. Year-to-date, the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) has brought in $724 million in new assets despite tumbling Treasury yields that have lifted returns by and inflows to long Treasury ETFs. [Crazy to be Long Inverse Bond ETFs]
UltraShort S&P500 ProShares
Tom Lydon’s clients own shares of QQQ and SPY.