21.93 -0.05 (-0.23%)
Pre-Market: 4:10AM EDT
Contrarian investors seeking to capitalize on stock market declines can profit during a bear market using an inverse exchange-traded fund (ETF). A bear market is typically defined as a situation where securities prices fall 20% or more from recent highs amid widespread investor pessimism.
Small cap stocks offer the potential for attractive returns, but they also tend to be more volatile than equities with larger market capitalizations. Companies considered part of the small cap universe generally have market values between $300 million and $2 billion.
Traders can position for further small-cap declines with these inverse ETFs that move in the opposite direction to the Russell 2000.