A chart of the QQQQ – NASDAQ 100 Tracking Stock versus QID ProShares Ultra Short QQQQ:

QQQQ closed out 2007 at $51.22 and 2008 at $29.74 a decline for the year of 41.94%.  QID UltraShort QQQ ProShares seeks to produce TWICE the inverse relationship of the QQQQ performance.  You would expect there for that QID would have advanced about twice the 41.94% QQQQ decline.  In fact QID ended 2007 at $37.98 and 2008 at $57.35 for a gain of 51%.  Not that there is anything wrong with a 51% gain but that is far short of the 80 to 84% gain you would have expected.

The picture is even more striking when you look as some of the ultra short sector ETF’s. According to Cramer these ETFs rebalance daily. They track the day-to-day changes in the sectors they cover.  Something to consider before playing these ultra short ETF’s for more than just a quick trade.