As seen nearly every single week since the year began, tech stocks were at the forefront of market rally. The S&P 500 Top 25 stocks by momentum underperformed the S&P 500 index (-3.65% versus -2.93%). Early September’s big swing up has seen substantial deflation, despite at least one rally.

Since the 19th of September, the prices of high-conviction stocks such as Tesla, Amazon and Nvidia have fallen by nearly 7%, 6% and 4% respectively. For long-term investors invested in these kinds of stocks, this might be bad news for their portfolio. However, for the professional investor with the wherewithal to consider a disciplined trading strategy, buying the Short (or “Leveraged Inverse”) ETPs is an important means of protecting the bottom line. For instance, this article from nearly a year ago demonstrates how buying a 20% coverage in the Tesla 3X Short ETP (TS3S) essentially ends up preserving a substantial amount of the value accrued by the stock across 2021.

Buying a short ETP holds several advantages over a short position held in the equity itself. For one, there is no need to constantly maintain a margin. Furthermore, the leverage factor is constantly maintained, thereby requiring no special effort by the investor. Depending on jurisdiction, there could be advantages to holding an ETP instead of a short position. For instance, in the UK, a short ETP can be held in a tax-saving ISA account while a short position can’t be.

Over the course of the past week as well as this past Monday, short ETPs have been the best-performing instruments across the entire range of Leverage Shares’ products.