• Exchange-traded funds (ETFs) exist for investors to easily gain exposure to specific markets or market circumstances without taking on multiple transactions. For example, to acquire the same returns as the S&P 500, you could purchase an equal amount of all 500 stocks in the index, or just purchase shares in ticker "SPY," an ETF that tracks this index. Likewise, some fund managers provide ETFs that profit in bear markets, which are long-term stock market declines.
  
  

"SDS"

• The ETF with ticker "SDS" is popular in bear markets. This ETF is an inverse leveraged fund called the "ProShares UltraShort S&P500 ETF." For each percentage point that the S&P 500 drops, your shares of SDS will instead rise by two percent. This provides excellent profit potential when the stock market is dropping. For example, in 2008, when the overall stock market crashed, SDS more than doubled in value. These funds are called "leveraged" because their movement exceeds the movement of the underlying index they track, and are "inverse" because this movement is in the opposite direction. Buying shares in such funds is an alternative to "shorting" the market--another way to profit from stock market declines. Thus, these funds often have the word "short" in their name.
  
  

"TZA"

• The "Direxion Russell 2000 Bearish 3X ETF" with ticker symbol "TZA" provides similar exposure to the stock market as ETF "SDS." However, instead of tracking the S&P 500 index, this fund is instead based on the Russell 2000, a larger collection of stocks that are mostly mid-cap, or smaller companies than the S&P 500. The Russell 2000 tends to exhibit more volatility in its own right, and when you leverage this behavior, you see significant risk-versus-reward potential. During the month of November 2008, as the stock market crashed, this fund nearly tripled in value in just 30 days. It repeated this performance during the first two months of 2009 when the stock market fell to historic multi-year lows.
  
  

"DXD"

• Investors who closely follow the Dow Jones Industrial Average may also look at the ETF with ticker "DXD," the "ProShares UltraShort Dow 30 ETF." This fund offers double the inverse performance of the Dow's 30 stocks. During September and October 2008, at the height of the bear market of that year, "DXD" rose from $59.67 to $98 per share in only two weeks. However, when the stock market rebounds, leveraged ETFs give up these gains just as fast. This ETF lost 50 percent of its value between the height of the crash and the end of the year. Bear market ETF traders must be quick with their trades to capitalize on any gains.