When my editor alerted me to the news that the SEC recently blocked a set of new, leveraged technology and cryptocurrency ETFs, my first reaction was “I guess we finally know where the line in the sand is.” Don’t mistake my views here. I am a big fan of 3x leveraged ETFs, and leveraged ETFs in general. I’ve been using them since they debuted. And sort of like other potentially dangerous habits such as alcohol, smoking, firearms, and being a fan of the New York Jets or Washington Commanders, warning labels ...

Core Insights - Netflix's stock experienced a decline of 9.4% over the past five days following a significant deal with Warner Bros. Discovery, while leveraged ETFs tracking Netflix have seen even larger declines due to the nature of their structure [2][4] Group 1: Leveraged ETFs Performance - The Direxion Daily NFLX Bull 2X Shares (NFXL) is down by 5.5% year to date, despite Netflix stock being up by 9% [2] - The Direxion Daily NFLX Bear 1X Shares ETF (NFXS) has also declined by over 14% year to date, illustrating the volatility and decay associated with leveraged ETFs [4] - Leveraged ETFs are designed for experienced traders and are not intended for long-term holding due to their tendency to lag behind the performance of the underlying stocks [4] Group 2: Mechanisms Behind Leveraged ETFs - The performance of leveraged ETFs is affected by "decay," which refers to their tendency to lag the securities they track, especially in volatile markets [2][6] - The leverage in these ETFs comes from the sizing of swap agreements, which can obscure the actual risk and return profile for investors [5] - Volatility decay means that when an investment loses value, it must increase by a higher percentage to return to its original value, a phenomenon that is amplified in leveraged ETFs [6]

RT Jason Shubnell (@JasonShubnell)$TXXS marks the 74th crypto ETF to launch this year, according to Bloomberg.Leveraged ETFs are typically short-term plays for experienced traders because of the risk involved. In fact, the SEC recently halted the potential launch of 3x and 5x ETFs.https://t.co/Q9WJT7G8HM ...

The SEC brake-checked the arms-race to offer ultra-leveraged ETFs this week. Invesco is adjourning its proxy vote to convert QQQ into an open-ended ETF. https://t.co/AheaA4RdlA ...

Tradr ETFs has launched a new tactical product for active market participants: the Tradr 1X Short Innovation 100 Monthly ETF (BATS:SMQ) , the first ETF to provide inverse (-100%) monthly-reset exposure to the Invesco QQQ (NASDAQ:QQQ) , also referred to as the Innovation 100.Also Read: Three New Horizon ETFs Hit The Market — Here’s What Investors Should KnowThe launch gives traders a fresh way to express medium-term bearish views on one of the market's most closely watched benchmarks — but without the path-d ...

While the prospect of doubling or tripling the returns of a benchmark index like the S&P 500 is tantalizing, investors should understand the finer points of leveraged ETFs before they take the plunge. Here are some key takeaways for average investors.For more guidance on ETF investing, check out the full guide at this link .SSO, in contrast, delivers 2x daily S&P 500 exposure, resulting in a broader sector mix—technology (31%), a large allocation to cash and others (30%), and financial services (9%). Its to ...

Core Viewpoint - ProShares has withdrawn its registration request for highly leveraged ETFs following a warning from the U.S. Securities and Exchange Commission (SEC) regarding risk exposures and the review of such plans [1][2]. Group 1: SEC's Regulatory Actions - The SEC sent letters to nine ETF providers, including ProShares, requesting clarity on risks associated with funds aiming to track up to five times the performance of underlying stocks [2]. - The SEC's concerns are based on Rule 18f-4 under the Investment Company Act of 1940, which mandates that a fund's value-at-risk must remain below 200% of an appropriate reference portfolio [5]. - The SEC suggested that fund managers revise their strategies to comply with regulations or withdraw their filings [5]. Group 2: Market Context and Trends - Leveraged ETFs have gained popularity among retail investors due to bullish market sentiment, speculative trading, and innovation in products, particularly around single stocks and cryptocurrencies [4]. - The scrutiny from the SEC adds pressure to the leveraged ETF market, which continues to attract retail investors despite concerns over complexity and risks [6]. - The ProShares UltraPro QQQ ETF, the largest leveraged ETF by assets under management, targets three times the daily performance of the Nasdaq 100 index and has seen over 40% gains this year, highlighting the potential for high returns alongside increased risks [7].

The SEC is cracking down on highly leveraged ETFs.This is probably a very good idea. https://t.co/rtgyG9WHhl ...

RT Denitsa Tsekova (@denitsa_tsekova)The SEC has issued a flurry of warning letters to some of the country’s most prolific providers of leveraged ETFs effectively blocking products designed to deliver 3x and 5x the daily returns of stocks, commodities and cryptocurrencies.https://t.co/E4UEHNVw63 ...

XRP and Solana Are Jumping. They Just Got 2 Leveraged ETFs.► https://t.co/xdhnUL4l9R https://t.co/xdhnUL4l9R ...