I am writing to express serious concern over FINRA Regulatory Notice #22-08 and the prospect of restricting my ability to invest in these leveraged products. I am a retail investor that has done significant diligence on these products. I understand their risks, I understand the concept of volatility decay, and yet as a relatively small time investor I've been able to enjoy significant returns with these products by employing relatively simple strategies. The warnings are out there on these funds and I was concerned before diving in. I did my diligence though. I charted years of UPRO data vs. SPY, I read up on and analyzed volatility decay and some of the challenges with holding the stock longer term, and I understood the compounding nature of triple leveraged losses in a downturn. I understood all the risks but I also recognized that at the end of the day the ETF tracked the underlying S&P. Armed with my diligence, I saw the COVID crash as an opportunity to jump into UPRO. The market in my opinion was over-sold and given my time horizon (not needing to be liquid in the next 10 years off that investment), I jumped in and bought UPRO. As suspected, the market eventually recovered and I reaped tremendous returns associated to it. This investment was one of the best I've made and as a father of 3 will help put my kids through college. Institutions use leverage all the time and I don't understand why I as a retail investor should not be given that same opportunity to compete. We are capable of doing our research and should have access to these products.
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Brad Welch Comment On Regulatory Notice 22-08
I am writing to express serious concern over FINRA Regulatory Notice #22-08 and the prospect of restricting my ability to invest in these leveraged products. I am a retail investor that has done significant diligence on these products. I understand their risks, I understand the concept of volatility decay, and yet as a relatively small time investor I've been able to enjoy significant returns with these products by employing relatively simple strategies. The warnings are out there on these funds and I was concerned before diving in. I did my diligence though. I charted years of UPRO data vs. SPY, I read up on and analyzed volatility decay and some of the challenges with holding the stock longer term, and I understood the compounding nature of triple leveraged losses in a downturn. I understood all the risks but I also recognized that at the end of the day the ETF tracked the underlying S&P. Armed with my diligence, I saw the COVID crash as an opportunity to jump into UPRO. The market in my opinion was over-sold and given my time horizon (not needing to be liquid in the next 10 years off that investment), I jumped in and bought UPRO. As suspected, the market eventually recovered and I reaped tremendous returns associated to it. This investment was one of the best I've made and as a father of 3 will help put my kids through college. Institutions use leverage all the time and I don't understand why I as a retail investor should not be given that same opportunity to compete. We are capable of doing our research and should have access to these products.