These are products that are used by sophisticated investors who understand the risks and are willing to take them as part of their overall strategy for their reward.
Restricting access or imposing onerous criteria to meet before an investor can trade/invest in them goes against every principle of a free-market economy.
The entire premise of this regulatory notice is false, and data mining is used to push that narrative. While the compounding effects are felt on a daily basis, the insight on triple-levered ETFs (especially the S&P 500 and NDX-100 triple-levered ETFs) is that over long periods of time, at worst, they act like a single-levered ETF, and at best provide returns that are many % points above the returns of the index, though not exactly 3 times the index. This not so widely understood feature helps investors achieve their financial goals much quicker than other products.
When used in conjunction with options, they are a very viable way to generate income on a weekly basis thereby enhancing the CAGR of the portfolio, especially since the amount of premium received is affected to a large extent by the volatility of the underlying. It encourages picking up ETFs that an investor would like to hold for the long-term.
Just like shorting is essential for efficient working of the stock market, and for price discovery, the inverse ETFs provide a similar functionality, with a better mindset behaviorally.
While the intention is to protect investors, it is best served by better tools to educate investors along with disclosures of the risk-reward rather than introduce onerous restrictions and criteria.
For the Public
FINRA DATA
FINRA Data provides non-commercial use of data, specifically the ability to save data views and create and manage a Bond Watchlist.
For Industry Professionals
FINPRO
Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks.
For Member Firms
FINRA GATEWAY
Firm compliance professionals can access filings and requests, run reports and submit support tickets.
For Case Participants
DR PORTAL
Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal.
Need Help? | Check System Status
Log In to other FINRA systems
Anonymous Comment On Regulatory Notice 22-08
These are products that are used by sophisticated investors who understand the risks and are willing to take them as part of their overall strategy for their reward.
Restricting access or imposing onerous criteria to meet before an investor can trade/invest in them goes against every principle of a free-market economy.
The entire premise of this regulatory notice is false, and data mining is used to push that narrative. While the compounding effects are felt on a daily basis, the insight on triple-levered ETFs (especially the S&P 500 and NDX-100 triple-levered ETFs) is that over long periods of time, at worst, they act like a single-levered ETF, and at best provide returns that are many % points above the returns of the index, though not exactly 3 times the index. This not so widely understood feature helps investors achieve their financial goals much quicker than other products.
When used in conjunction with options, they are a very viable way to generate income on a weekly basis thereby enhancing the CAGR of the portfolio, especially since the amount of premium received is affected to a large extent by the volatility of the underlying. It encourages picking up ETFs that an investor would like to hold for the long-term.
Just like shorting is essential for efficient working of the stock market, and for price discovery, the inverse ETFs provide a similar functionality, with a better mindset behaviorally.
While the intention is to protect investors, it is best served by better tools to educate investors along with disclosures of the risk-reward rather than introduce onerous restrictions and criteria.