At the risk of sounding like an idiot, I'll ask: What's the pt of an inverse product other than being able to have a hedged position within a single account? Don't you think that giving longs the option of not hitting out of the SPY when it's going down would lead to lower volatility?
They should have never split the Q`s in the first place...... Bizzare trading ranges. For exp. yesterday SPY true range was 1.28 and SSO was 1.56...QQQQ .91 and QLQ 3.08. No double whammy for the SPX deriv and Triple for NDX deriv...
I think the main point of this product is the ability to short the market without the need to short sell the ETF.
Got that, but if longs can just hedge out the downside without hitting out and shorts can just buy the inverse product, wouldn't that lead to less movement in the SPY and, hence, the inverse product itself (assuming they move together)? Perhaps I'm viewing this naively, but I like it when shorts start hitting bids, push the instrument down, and then the longs get shaken out.... creating a tradeable downtrend.
These things are products, they aren't going to affect the trend of anything, they're just more products ... salesmen need them ... to sell products to customers ... so they can make money.