Leveraged ETFs especially on broad indices such as SP500/NDX100/US-Treasury are much better way to adjust risk reward tradeoff.
1. Such ETFs are LESS RISKY compared to Call/Put Options in which investors usually loose money due to time decays.
2. Such ETFs are also a much cheaper way to achieve leverage instead of margin accounts/interest.
3. Leveraged ETFs are much more efficient than Call/Put options which have much wider bid/ask spreads
I am surprised that this proposal is being considered. It will push investors into using other forms of leverage using Options and Margins which are lot riskier and more expensive.
Arvind Chopra Comment On Regulatory Notice 22-08
Leveraged ETFs especially on broad indices such as SP500/NDX100/US-Treasury are much better way to adjust risk reward tradeoff.
1. Such ETFs are LESS RISKY compared to Call/Put Options in which investors usually loose money due to time decays.
2. Such ETFs are also a much cheaper way to achieve leverage instead of margin accounts/interest.
3. Leveraged ETFs are much more efficient than Call/Put options which have much wider bid/ask spreads
I am surprised that this proposal is being considered. It will push investors into using other forms of leverage using Options and Margins which are lot riskier and more expensive.