Observing a stock fall from $24 to $8 in a single year can be particularly painful. That suffering is embodied in SCO stock. It is an inverse leveraged ETF that delivers two times the daily performance of WTI crude oil futures in order to profit when oil prices decline. It is a hedge in theory. In reality, it’s a grinder that, unless you time it precisely, destroys capital. Furthermore, most investors are unable to time it precisely, as the 64% one-year loss shows.
SCO’s math is rather straightforward. SCO increases when oil decreases. SCO declines twice as quickly as oil does. It is designed for traders who desire increased exposure to the impending crater in crude. The problem is that, because the fund rebalances every day, returns compound in ways that deviate significantly from the underlying index over any time frame longer than a single trading session. You won’t see a negative two-time weekly oil move if you hold it for a week. Even if you are directionally correct, you’re receiving a messier product that is shaped by volatility and compounding effects that reduce value.
As you move along the period, the decline of SCO reflects the growth of oil. Due to concerns about a recession and weak demand projections, crude was selling in the $60s at the beginning of 2025. Expectations that prices would continue to decline helped SCO trade close to $24. Geopolitical conflicts then erupted. Conflicts in the Middle East intensified. Production cuts by OPEC were maintained. Demand recovered more quickly than analysts had anticipated. WTI rose to the $80s and then the $90s. SCO collapsed. It was barely hanging on at its 52-week low of $7.56 by April 2026, a far cry from what it had been only months before.
| Fund Information | Details |
|---|---|
| Fund Name | ProShares UltraShort Bloomberg Crude Oil |
| Ticker Symbol | SCO |
| Current Price | $8.02 (as of April 9, 2026) |
| 52-Week Range | $7.56 – $24.52 |
| Fund Type | Inverse Leveraged ETF (-2x daily performance) |
| Underlying Index | Bloomberg Commodity Balanced WTI Crude Oil Index |
| Expense Ratio | 0.95% |
| 1-Year Return | -64.63% (as of April 8, 2026) |
| Primary Use | Short-term tactical trading, bearish oil bets |
| Risk Level | High (not suitable for long-term holding) |
| Daily Rebalancing | Yes (returns compound daily, diverging from index over time) |
| Target Investor | Day traders, short-term speculators |
Investors that purchased SCO in anticipation of a decline in oil prices were devastated. As oil marched higher, some hung onto their positions for too long, seeing them bleed every day. Convinced that crude could not maintain momentum over $90, others attempted to average down. They were mistaken. Your convictions don’t matter to oil. It is influenced by supply, demand, and unpredictable geopolitical developments. For buy-and-hold investors, SCO multiplies that volatility in the most detrimental way. Because compounding works against you, you lose more money every day you hold it during an oil rally than you should mathematically.
SCO is perceived as more of a warning label than a practical investment option. The fund’s issuer, ProShares, is clear about the dangers. SCO is intended for daily trading, not long-term holding, as the prospectus makes clear. Although the expense ratio of 0.95% is high for an ETF, performance is not negatively impacted by it. The structure is what destroys performance. Even if the underlying asset trends in your favor, inverse leveraged funds eventually lose value in erratic markets. It’s not a bug; it’s a feature. Leverage and rebalancing are expenses that steadily reduce returns.
However, day traders continue to return. Every time oil makes a significant move, the volume on SCO continues to be strong. For traders who wish to quickly expose themselves to a negative oil thesis without actually shorting futures, the fund is useful. SCO provides 10% upside if you think crude is going to drop 5% tomorrow. Bank the gain, close the position before the market closes, and move on. The use case is that. The majority of people don’t trade it that way, which is the issue. They retain it for weeks or months in the hopes that the oil would ultimately convert, treating it like a stock. Seldom does it succeed.
ProShares, which has its headquarters in Chicago, is constantly asked why inverse and leveraged ETFs lose money over time. The response is always the same: these products perform just as intended on a daily basis, but they are not intended for multi-day holds. The branding is not beneficial. “UltraShort” seems like a weapon for astute investors—aggressive and strategic. Technically, it is. However, it’s a product that needs exact timing and rigorous discipline—qualities that the majority of ordinary investors lack.
The way SCO functions during real oil crashes is fascinating. When crude momentarily turned negative in March 2020, SCO surged. In just a few days, traders who saw that move were able to multiply their investment. The fund produced enhanced inverse exposure amid a rapid, abrupt move, just as it had promised. However, those times are uncommon. Oil typically moves in a range or trends slowly, and SCO simply suffers. The tale is told by the 52-week range of $7.56 to $24.52. When the oil was weak, the highs occurred. When oil was strong, the lows occurred. The majority of traders work in the middle ground, which is a gradual decline.
SCO is not covered by analysts in the same manner as conventional stocks. There is no quarterly guidance, no CEO to interview, and no earnings report. Any analysis of SCO is essentially an analysis of crude since the fund’s performance is solely dependent on oil prices. SCO is a bad investment if you’re an oil bull. It could be helpful if you’re pessimistic for a day or two. You’re betting more on timing than fundamentals if you go beyond that.
It’s difficult to avoid becoming dubious about shop involvement in such products. The prospectus is not read by the typical investor. They believe it’s a simple wager against oil after seeing the ticker, the leverage, and the inverse exposure. They then lose 60% after holding it for six months. Both parties bear some of the guilt. Despite ProShares’ clear warnings about the dangers, the product is nevertheless sold to consumers who don’t completely comprehend what they’re getting. Regulators discuss limiting access to inverse and leveraged ETFs on a regular basis, yet the products are nevertheless offered. As always, caveat emptor.
As SCO trades close to $8, it seems that this fund is just what it says it is: a short-term, high-risk trading tool that, when abused, destroys value. It’s not a fraud. It’s not damaged. It’s just very harsh. The price of oil is rising. SCO is not working. The trade is operating as intended. It’s another matter entirely whether anyone should really make the transaction. The market appears to have provided a clear response to that question, as seen by the 64% one-year loss. However, traders continue to hope they can time it better than the previous man since volume keeps coming in. Most of them can’t so far.
