What Is SCO? ProShares UltraShort Bloomberg Crude Oil

SCO is the ProShares UltraShort Bloomberg Crude Oil ETF, a leveraged inverse fund that seeks daily results, before fees and expenses, equal to negative 2x (negative 200%) the daily performance of the Bloomberg Commodity Balanced WTI Crude Oil Index. It is engineered to move opposite to WTI crude oil, rising when oil falls and falling when oil rises, at roughly double the daily magnitude.

Issued by ProShares and structured as a commodity pool, SCO delivers a K-1 at tax time and carries a net expense ratio near 0.95%. Its daily leverage reset makes it a short-term instrument for expressing a bearish view on crude, not a long-term position or a passive hedge.

Approximate weights as of mid-2026; refresh quarterly from ProShares's fund page. Each ticker links to its individual stock guide in Walnut.

SCO holds no physical oil and no ordinary stocks. Its exposure comes from short positions in WTI crude oil futures and swap agreements referencing the Bloomberg Commodity Balanced WTI Crude Oil Index, at roughly negative 200% notional, with cash and short-term Treasuries held as collateral.

The balanced index it references spreads WTI futures across multiple contract months rather than only the front month. On the inverse side, the futures curve still matters: roll dynamics and contango affect what SCO earns or loses over time, in addition to the daily oil-price move.

SCO is the bearish, 2x inverse crude oil fund, while UCO is its 2x long mirror and USO is the unleveraged, roughly 1x long tracker. Choosing among them comes down to direction and aggressiveness: SCO for a leveraged bet that oil falls, UCO for a leveraged bet that it rises, USO for a straightforward long oil view.

All three are trading tools rather than core holdings, but SCO and UCO carry the added risk of daily-reset decay. SCO is the tool to reach for only when you have a clear, short-term expectation that crude prices will decline, and you intend to monitor and manage the position closely.

SCO resets its inverse 2x leverage every day, so its objective holds for a single day at a time. Over longer stretches, returns compound, and in a choppy market that compounding erodes value through volatility decay. A sequence of alternating up and down days can leave SCO lower even if oil finishes near where it started.

Because SCO is short oil futures, the futures curve cuts the other way from a long fund: a market in contango can be a tailwind on the roll, while backwardation can be a headwind. Combined with leverage decay, these dynamics make SCO's multi-day path hard to predict, which is why ProShares frames it as a short-holding-period tool that needs daily attention.

SCO fits active traders who want a leveraged, short-term way to profit from falling crude oil or to briefly hedge oil exposure, and who understand that it amplifies losses when oil rises. It is not a long-term holding, and daily resets plus roll dynamics make even multi-week holds risky.

With no income, a roughly 0.95% expense ratio, and K-1 tax paperwork, SCO plays a narrow tactical role rather than a portfolio-anchor role. Whether leveraged inverse oil exposure suits you depends on your goals, risk tolerance, and time horizon. Walnut is not an investment adviser and this is not a recommendation.

SCO trades on NYSE Arca under the ticker SCO and is available through most US brokers, including Robinhood, Fidelity, Schwab, and Public, often in fractional shares. Because it is a leveraged inverse product, many traders use limit orders and watch positions closely rather than holding passively.

If you hold or plan to trade SCO, you can connect your brokerage to Walnut to view the position within your overall portfolio and thesis. Walnut mirrors your holdings read-only and never places trades on its own.

SCO delivers 2x the inverse of a WTI crude oil futures index, rising when oil falls. Daily leverage resets, volatility decay, and futures roll dynamics make it a short-term trading instrument, not a hedge to hold for weeks. Walnut is not an investment adviser and this is not a recommendation.

Whether SCO is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is SCO a buy?

SCO yields 0% as of mid-2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see SCO dividend: yield and schedule.