Investing Assets & Markets Exchange-Traded Funds List of Inverse and Leveraged Commodity ETFs By Mark Kennedy Mark Kennedy Mark Kennedy is an expert in investment and exchange-traded funds. He was an ETF options trader on the Philadelphia Stock Exchange floor and Vice President of Derivatives Trading for Goldman Sachs. Kennedy's trading positions were not limited to the oil ETF but included other ETFs such as the Qs. learn about our editorial policies Updated on April 26, 2022 Reviewed by Doretha Clemon Reviewed by Doretha Clemon Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 years. She is an adjunct professor at Connecticut State Colleges & Universities, Maryville University, and Indiana Wesleyan University. She is a Real Estate Investor and principal at Bruised Reed Housing Real Estate Trust, and a State of Connecticut Home Improvement License holder. learn about our financial review board Fact checked by Katie Turner Fact checked by Katie Turner Katie Turner is an editor, fact checker, and proofreader. Katie gained experience at McKinsey by fact-checking content about business, finance, and economic trends. At Dotdash, she began as a fact checker for Investopedia, eventually joining both Investopedia and The Balance as a fact checker, ensuring the accuracy of information across a variety of financial topics. learn about our editorial policies In This Article View All In This Article What Are Leveraged and Inverse ETFs? Types of Leveraged and Inverse ETFs Should You Trade These ETFs? Frequently Asked Questions (FAQs) Photo: Piotr Powietrzynski / Getty Images Plenty of commodity exchange-traded funds (ETFs) are on the market today, including broad commodity funds and ETFs that track specific assets like energy, metals, and materials. Some investors favor implementing advanced ETF trading strategies like leveraged and inverse ETFs. These funds are for serious traders, and caution is highly advised when putting your money into these investments. For those traders who want to apply alternate strategies to the commodity ETF market, here is a list of both leveraged and inverse ETFs, broken out by commodity type, both broad and specific. What Are Leveraged and Inverse ETFs? A leveraged commodity exchange-traded fund uses debt or derivatives to amplify or increase the returns of a commodity index. Leverage refers to increasing exposure to an asset without increasing investor outlays. Leveraged and inverse commodity ETFs are generally, but not always, identified by a 2x, 3x, or similar multiplier in their name. You might also see them with "bear" or "bull" in their names, which refer to the investor's outlook on the index. An investor with a bullish outlook expects the index to rise, while one with a bearish outlook expects the index to drop. An inverse commodity ETF is designed in a way that inverts the returns on the index it tracks. Inverse ETFs attempt to turn an index value decrease into an increase in returns. For example, the Direxion Daily Energy Bull 2X Shares ETF (ERX) is a leveraged fund based on the Energy Select Sector Index (IXETR)—note the bull reference—that attempts to deliver two times the return of the index. So, if the index rose five points, the ETF theoretically would return the equivalent of a 10-point increase. The Direxion Daily Energy Bear 2X Shares ETF (ERY) is the inverse of ERX—note the "bear" reference. ERY attempts to turn a drop in the Energy Select Sector Index into returns that equal two times the inverse of the drop. For instance, if the index dropped five points, the ETF would theoretically return the equivalent of a 10-point increase. Note Leveraged and inverse commodity ETFs are designed for daily trades, not buy-and-hold strategies. Attempting to hold these investment instruments for more than one trading day can result in significant, amplified losses. Types of Leveraged and Inverse Commodity ETFs There are several leveraged and inverse ETFs you can choose to swing or day trade. Here are a few that demonstrate these ETFs and the commodity sectors they represent. Leveraged and Inverse Energy ETFs These are based on an energy index comprised of the stocks of companies in the oil, gas & consumable fuels, and energy equipment services: ERX - Direxion Daily Energy Bull 2X Shares ETFERY - Direxion Daily Energy Bear 2X Shares ETF Leveraged and Inverse Oil ETFs The list of leveraged and inverse oil ETFs is dwindling—there are only a few traded in the U.S.: SCO - ProShares UltraShort Bloomberg Crude Oil (-2x)UCO - ProShares UltraShort Bloomberg Crude Oil (2x) Leveraged and Inverse Natural Gas ETFs ProShares is the only one to offer leverage and inverse natural gas ETFs: BOIL – ProShares Ultra DJ UBS Natural Gas ETF (2x)KOLD – ProShares UltraShort DJ UBS Natural Gas ETF (-2x) Leveraged and Inverse Gold ETFs Leveraged and inverse gold ETFs are few in number as well: DUST - Direxion Daily Gold Miners Bear 2x Shares ETFNUGT - Direxion Daily Gold Miners Bull 2x Shares ETFGLL - ProShares UltraShort Gold ETF (-2x)UGL - ProShares Ultra Gold ETF (2x) Leveraged and Inverse Silver ETFs There are only two leveraged and inverse silver ETFs: AGQ - ProShares Ultra Silver ETF (2x) ZSL – ProShares UltraShort Silver ETF (-2x) Leveraged and Inverse Materials ETFs Leveraged and inverse materials ETFs are also hard to find, with only a few to choose from: SMN – ProShares UltraShort Basic Materials ETF (-2x)UYM - ProShares UltraBasic Materials ETF (2x) Should You Trade Inverse and Leveraged Commodity ETFs? Leveraged and inverse ETF trading is an advanced strategy—not for novices. Additionally, you have no safety net because your brokerage isn't legally obligated to step in and stop you if you're making a risky trade. With many of these ETFs, the upside and downside are nearly limitless. Due to the risks involved, these instruments are under constant scrutiny from financial market regulators. Therefore, before making any trade, research all the funds you are considering for your portfolio. Conduct your due diligence, and be sure to consult your professional financial advisor unless you're a very experienced trader. Frequently Asked Questions (FAQs) How long should you hold a leveraged commodity ETF? There aren't any rules about how long you can or can't hold a leveraged commodity ETF. You can hold the position as long as anything else in your portfolio, as long as your account is in good standing. However, leveraged products are designed for short-term traders. The holdings aren't direct investments in the target, so a long-term investor would likely prefer to invest in non-leveraged commodity ETFs. How do you identify a leveraged ETF? A leveraged ETF will note in its prospectus that it is leveraged. Depending on the ETF and the brokerage you use, you may also find this information under sections such as "stated objectives" or "profile," but it will always be in an ETF's prospectus. What is the most leveraged inverse ETF? Leveraged and inverse ETFs generally will not go above or below 3x or -3x. The amount of debt taken on to achieve these results varies by commodity type and fund. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Direxion. "ERX ERY." ProShares. "ProShares Ultra Bloomberg Crude Oil (UCO)." ProShares. "UltraShort Bloomberg Crude Oil (SCO)." ProShares. "ProShares UltraShort Bloomberg Natural Gas (KOLD)." ProShares. "ProShares Ultra Bloomberg Natural Gas (BOIL)." ProShares. "ProShares Utra Gold (UGL)." ProShares. "UltraShort Gold (GLL)." ProShares. "Proshares UltraShort Silver." ProShares. "ProShares Ultra Silver." ProShares. "ProShares Ultra Basic Materials (UYM)." ProShares. "Proshares UltraShort Basic Materials (SMN)."