Hello!
A leveraged ETF is a fund that makes use of debt and financial derivatives to increase the daily performance of a certain index or asset class by twice or three times.
Leveraged ETFs typically amplify daily returns by either two or three times, and can be either be bull or bear ETFs.
An example would be the ProShares UltraPro Short S&P 500 ETF. It is an inverse triple-leveraged ETF that is designed to return three times the inverse of the S&P 500 index. This means that if the S&P 500 drops by 2% tomorrow, the fund should rise by roughly 6%. If the index rises by 1%, this fund should drop by about 3%.
Hope this helps!
Hello!
A leveraged ETF is a fund that makes use of debt and financial derivatives to increase the daily performance of a certain index or asset class by twice or three times.
Leveraged ETFs typically amplify daily returns by either two or three times, and can be either be bull or bear ETFs.
An example would be the ProShares UltraPro Short S&P 500 ETF. It is an inverse triple-leveraged ETF that is designed to return three times the inverse of the S&P 500 index. This means that if the S&P 500 drops by 2% tomorrow, the fund should rise by roughly 6%. If the index rises by 1%, this fund should drop by about 3%.
Hope this helps!