3 ETFs to Buy to Profit if the Quantum Computing Stocks Bubble Bursts
Inverse or “bear” single-stock exchange-traded funds (ETFs) are here. They’ve actually been around in different forms for a few years. But the pace of new product launches is accelerating. Or dare I say, spiking. That creates an opportunity for investors and traders who put in the effort to understand them.
Some use leverage, and some don’t. All of them require you to think outside the box.
Investors tend to be hard-wired to focus on “what can I buy that will go up in price.” That’s even more natural when we’ve had a 16-year run in which stocks have not stayed down for long.
History is filled with periods of 5-10 years or much longer where the stock market did not make a net profit. But that history does not include any period since about 2013. That doesn’t mean it won’t happen again, only that it has not occurred in a while.
There now exists a set of about 30 ETFs which are structured to profit when a particular stock falls. They are intended to work off a single day’s performance, which means that holding them longer than a day creates some funky math.
That is not necessarily a reason to avoid these inverse single-stock ETFs. It simply means that when a stock loses 10%, it takes 11% just to get back to break-even. The more a stock goes up when we hold an inverse ETF, the more that math of investment loss works against us.
Here are three stocks ripe for bearish bets, and the ETFs that can make those bets happen. Again, be careful considering these, since a sharp rise in the stock price means sharp declines for the bear ETFs that track them. I show those in a table below the three charts.
Changing the corporate name to some allegedly cool term like “alphabet” or “meta” might have worked for others. But with the former MicroStrategy, now known simply as Strategy (MSTR), the best strategy might eventually be to try to profit from its unwinding. It is tied to the crypto business, and it has had more lives than a cat. But this one is leaning bearish to me.
Then, there’s Rigetti Computing (RGTI). For those comparing the dot-com bubble to the market in 2025 and saying “but back then there were companies selling at high valuations that made no profits…” Here’s one of those, a former penny stock turned $20 billion market cap darling. That was at its peak. From the looks of it, this one might have been ahead of its skis.
Relatively speaking, D-Wave Quantum (QBTS) is a bargain on a profit margin basis. According to Barchart data, its profit margin is more than -1,600% (yes, that’s a minus sign). That’s about 15% better than that of RGTI. Just saying. The stock chart below looks like a clone of the one immediately above.
Here are the corresponding inverse ETFs. All of these are -2X, which means a 1% decline in the stock in a day should move the inverse ETF about 2% higher. And the opposite is also the case.
To bet against Strategy, there is the T-Rex 2X Inverse MSTR Daily Target ETF (MSTZ). For Rigetti, the Defiance Daily Target 2X Short RGTI ETF (RGTZ). And for D-Wave, the Defiance Daily Target 2X Short QBTS ETF (QBTZ).
I suspect I’ll be coming back to this topic as markets eventually have an overdue “jailbreak” moment to the downside.
Consider this article a starting point for the next time you think to yourself, “that stock looks like it is headed south, too bad I can’t profit from that.” Because now you can, without shorting it or buying put options.
These inverse single-stock ETFs are not for everyone, but that’s up to each investor to decide for themselves.
Rob Isbitts, founder of Sungarden Investment Publishing, is a semi-retired chief investment officer, whose current research is found here at Barchart, as well as on Substack.
On the date of publication, Rob Isbitts did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com