The long-awaited U.S. inflation data, released on Tuesday 13 September, was the main reason of the plummeting investors’ sentiment, sending the “Big Three” U.S. benchmarks – Dow Jones, S&P 500 and Nasdaq – precipitously lower. At the end of the day, they fell by 3.94%, 4.32% and 5.16%, respectively, immediately pushing the U.S. stock market back into a bearish trend. The negative consensus forecast came true. Consumer prices in the United States rose by 8.3% in August compared to August 2021. This is 0.2 p.p. lower than in July, but the market expected inflation to fall to 8.1%.

SQQQ provides 3x inverse 1-day returns of the Nasdaq 100 Index. This popular leveraged ETF offers positive convexity in the direction of the bet (i.e., it doesn’t bear the well-known short-covering risks a trader typically incurs executing short trading). As the name suggests, the Proshares UltraPro Short QQQ ETF seeks daily returns that is -3x the return of the Nasdaq-100 Index. This exchange traded fund achieves the -3x daily return target by entering into total return swaps with large banks that are reset nightly.

ProShares Trust - ProShares UltraPro Short QQQ – is launched and managed by ProShare Advisors LLC. It invests in public equity markets of global region through derivatives in stocks of companies operating across energy, real estate, materials, industrials, consumer discretionary, consumer staples, health care, information technology, communication services and utilities sectors. As it was mentioned above, the fund employs short strategy and uses derivatives such as futures and swaps to create its portfolio. The fund invests in growth and value stocks of diversified market cap companies. ProShares Trust was formed on February 9, 2010 in the United States.

According to Nasdaq.com, looking at yesterday’s week-over-week shares outstanding flows among the universe of ETFs covered at ETF Channel, the ProShares UltraPro Short QQQ clearly stood out where an approximate $235.8 million dollar inflow was detected – that was a 5.2% weekly increase in outstanding units (from 112,800,550 to 118,650,550). We should stay tuned and expect more despite abnormal market volatility, which is three times as high in the case of this 3X leveraged ETF.