arbiter
JournalsAccount

Short selling ETFs and market performance

Doina Chichernea et al.

Journal of Financial Research2026https://doi.org/10.1111/jfir.70050article
AJG 3ABDC A
Weight
0.50

Abstract

We examine short selling activity in leveraged Exchange‐Traded Funds (ETFs) and its impact on underlying index performance. Using a novel measure of ETF short exposure, which includes long positions in inverse leveraged ETFs, we document that high short exposure is associated with positive performance in the subsequent period. While the short exposure of both 1X and leveraged ETFs predicts future returns, the latter is more pronounced. This predictability is particularly significant during periods of economic downturns and is primarily driven by inverse leveraged ETFs. Our findings highlight the critical role of leveraged ETFs in hedging strategies and suggest that monitoring short exposure in broad market ETFs provides valuable insights for investors during volatile times.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1111/jfir.70050

Or copy a formatted citation

@article{doina2026,
  title        = {{Short selling ETFs and market performance}},
  author       = {Doina Chichernea et al.},
  journal      = {Journal of Financial Research},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/jfir.70050},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Short selling ETFs and market performance

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.