Leveraged and inverse funds allow me to gain exposure to leveraged and short positions without having to take on leverage myself. I use inverse ETFs to hedge my long positions and to express a bearish view on the market. QQQ is down roughly 20% YTD, but I have been able to hedge my long stock positions and profit from this decline through the PSQ, the inverse of QQQ. I do not want to take on leverage myself, but enjoy the access to these strategies that inverse ETFs allow. I could gain exposure to downside moves through put options, but in my opinion this is a higher risk and more difficult trade to navigate compared to an inverse ETF. I understand the risks associated with inverse and leveraged ETFs, that they represent a daily exposure to the underlying, and that performance may deviate from the underlying if held over a longer time period. The decision to accept these risks is my own. Inverse and leveraged ETFs are a democratizing force in investing, and removing access to these ETFs would restrict smaller investors' ability to access strategies that are absolutely critical to protecting the value of their portfolios.
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Bryce Sandberg Comment On Regulatory Notice 22-08
Leveraged and inverse funds allow me to gain exposure to leveraged and short positions without having to take on leverage myself. I use inverse ETFs to hedge my long positions and to express a bearish view on the market. QQQ is down roughly 20% YTD, but I have been able to hedge my long stock positions and profit from this decline through the PSQ, the inverse of QQQ. I do not want to take on leverage myself, but enjoy the access to these strategies that inverse ETFs allow. I could gain exposure to downside moves through put options, but in my opinion this is a higher risk and more difficult trade to navigate compared to an inverse ETF. I understand the risks associated with inverse and leveraged ETFs, that they represent a daily exposure to the underlying, and that performance may deviate from the underlying if held over a longer time period. The decision to accept these risks is my own. Inverse and leveraged ETFs are a democratizing force in investing, and removing access to these ETFs would restrict smaller investors' ability to access strategies that are absolutely critical to protecting the value of their portfolios.