There’s nothing complex about these products, and the mechanics are the same for a leveraged ETF tied to an index as they are for a single-stock ETF. As they say on social media, I’m left SMH. Nevertheless, the Securities and Exchange Commission has just approved leveraged and inverse ETFs on single stocks. Many traders and investors have become disillusioned with these products because of the hidden risks and “decay” around the daily rebalancing. As is typical, their success prompted Wall Street bankers to come up with riskier iterations that offered the potential for bigger returns by employing derivatives. They started out as a cheaper alternative to mutual funds for investors just wanting to track broad stock indexes. Exchange-traded funds have been around since the 1990s.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
March 2023
Categories |