Consider the following trade: Go long the normal ETF (e.g. SPY, FXI) Go long the short ETF Now if the two ETFs have perfect inverse tracking, and normal ETF goes up 100%+, you have a risk-free profit, since your long in the short ETF cannot fall below zero. Second, look at the "turbocharged" short ETFs such as FXP. Now the problem is magnified. Just go long $10k in FXI, and go long $5k in FXP. If the FXI goes up or down more than 50%, you have a risk-free profit. So, can anyone explain this apparent paradox? First person to give the right answer gets a cookie.