In the money puts might be the best. Higher cost up front, but less time value loss, of course less upside as it must overcome the real value. Of course one might need a volatile market for this?!

Selling puts on your favourite long term holds might be the best alternatives other than outright purchase.

It’s amazing that this is not crystal clear to everyone. I’ve heard of financial planners who encourage people to buy inverse funds, rather than simply sell a portion of their holdings. More fees for the planner.

“purchasing put options provides more leverage, risk limited to capital invested in the puts, and possibly costs less (due to the leverage), I might be more inclined to consider these over the single inverse ETFs as a hedging tool.”

They don’t cost less. Puts are expensive. You know I’m a huge fan of using options to hedge risk, but I suggest your readers consider the collar trade (buy puts, but also sell out of the money calls to offset the cost of the puts. This limits the upside, but it makes protecting your portfolio affordable – often free).

I’ve wondered the same thing and asked about it. My understanding is the underlying derivative contracts just don’t make that economically feasible.

It would be good to get a template though of how you would actually manage a longer duration inverse ETF.

I don’t understand the underlying derivatives enough, but maybe you could play out the thought experiment to say if it’s possible?