Short selling banned in Italy for 3 months. Am I affected with my Short ETF investments?

I cannot provide any sources and am just guessing.

The ETF you talk about is located in Ireland. That has two effects:

• If you would sort it, the Italian regulation seems only to affect Italian stocks.
• But you don't short it, but hold it as a long position.

So you are not affected.

Is the ETF affected? Maybe - once short selling is banned in Ireland as well, as it itself deals with "short" positions.

If that would happen, the ETF resp. its APs would be limited in their actions in a significant way, but it might be that they are able to sell short "over the counter" respectively inside their own organization. (This one is even more speculation than the other paragraphs.)

Inverse ETFs short can short stocks as well as utilize options and other derivatives, swap agreements, and/or futures contracts.

Italy's three month ban of short selling applies to stocks. If it's no more than that, the ETF may be able to continue doing business as usual, depending on the MO of their prospectus.

When the US banned the shorting of 100 or so financial stocks in 2008, I was short many of them. I was not forced to close existing positions except when due to lack of ongoing borrowability, I had a forced buy in. But that had nothing to do with the newly imposed ban on short sales.

The short answer is that if this applies to you, you'll be notified. Until then, reap the benefits and if possible (cost effective), look to lock in the gains as they accrue.