(Bloomberg) — Individual investors pushed cash into a levered exchange-traded fund betting against the tech-heavy Nasdaq 100 as they looked to profit from the market’s spiral.
Retail traders bought $76.6 million of the ProShares UltraPro Short QQQ ETF (ticker SQQQ) — an ETF that delivers results that are three times the inverse performance of the gauge — amid Monday’s rout, according to data compiled by JPMorgan Chase & Co. strategist Peng Cheng. That reversal comes after months of betting that crowd favorites like the Invesco QQQ Trust Series 1 (ticker QQQ) and Nvidia Corp. would continue to rise.
The retail crowd has now bought about $121 million in SQQQ over the past five sessions, the most in at least five years, Vanda Research data show.
The SQQQ is up nearly 50% this year amid the market’s tumble. However, it’s worth noting that holders of the ETF could face painful losses if the market rebounds. While the recent gains likely helped attract retail traders, the ETF is still down 33% in the past 12 months.
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