Regulators should not be deciding investment strategies for families. They should be making it easier for these families to invest smaller amounts of money in the market. It's high time all investors regardless of their income be allowed to purchase fractional shares.
They shouldn't be imposing special processes like testing investor knowledge of ETFs but rather guide a TDAmeritrade to include hedge related documentation to better teach investors how to use these like a see-saw.
Ex. For simplicity I'll use $400 for NRGU (Big Oil 3x ETF Bull) & $100 for NRGD (Big Oil 3x ETF Bear). When someone goes to the NRGU page they should see a HEDGE link including the NRGD page & the ratio. Clicking on that link would inform them a see-saw strategy strongly suggests buying NRGD right now.
So currently a small income family would need $100 to buy NRGD. If regulators allow fractional share purchases of NRGD then that family could risk $10 or even less.
On the NRGD page, the hedge line would include a ratio of 1:4 & NRGU.
That family could simply eye the ratio link as to when to buy the hedge side. Let's say the Ukraine war ends in Jan, 2023.
The NRGD ratio then might be 4:1 vs NRGU. Clicking on the link would advise them to buy NRGU in a see-saw strategy.
The $100 or $10 the family invested would now be worth $400 or $40. This family can sell enough NRGD to get double the money they originally invested and decide how much of their nest egg (NRGD) they want to shift to NRGU for greater gain potential.
So once again I recommend,
1) hedge play information for all leveraged ETFs on trading sites for easier and more sound investing strategies for all investors.
2) fractional share purchases for all stocks, ETFs, funds, & even options. With AMZN over $2K/sh options are too pricey for most investors.
3) There is no need for a burdensome &/or costly process to test investor knowledge for leveraged ETFs. It is far more beneficial to inform all investors that these ETFs should be traded with a hedge strategy in mind. Hedge play documentation on these site pages will accomplish that.
John Hanley Comment On Regulatory Notice 22-08
Regulators should not be deciding investment strategies for families. They should be making it easier for these families to invest smaller amounts of money in the market. It's high time all investors regardless of their income be allowed to purchase fractional shares.
They shouldn't be imposing special processes like testing investor knowledge of ETFs but rather guide a TDAmeritrade to include hedge related documentation to better teach investors how to use these like a see-saw.
Ex. For simplicity I'll use $400 for NRGU (Big Oil 3x ETF Bull) & $100 for NRGD (Big Oil 3x ETF Bear). When someone goes to the NRGU page they should see a HEDGE link including the NRGD page & the ratio. Clicking on that link would inform them a see-saw strategy strongly suggests buying NRGD right now.
So currently a small income family would need $100 to buy NRGD. If regulators allow fractional share purchases of NRGD then that family could risk $10 or even less.
On the NRGD page, the hedge line would include a ratio of 1:4 & NRGU.
That family could simply eye the ratio link as to when to buy the hedge side. Let's say the Ukraine war ends in Jan, 2023.
The NRGD ratio then might be 4:1 vs NRGU. Clicking on the link would advise them to buy NRGU in a see-saw strategy.
The $100 or $10 the family invested would now be worth $400 or $40. This family can sell enough NRGD to get double the money they originally invested and decide how much of their nest egg (NRGD) they want to shift to NRGU for greater gain potential.
So once again I recommend,
1) hedge play information for all leveraged ETFs on trading sites for easier and more sound investing strategies for all investors.
2) fractional share purchases for all stocks, ETFs, funds, & even options. With AMZN over $2K/sh options are too pricey for most investors.
3) There is no need for a burdensome &/or costly process to test investor knowledge for leveraged ETFs. It is far more beneficial to inform all investors that these ETFs should be traded with a hedge strategy in mind. Hedge play documentation on these site pages will accomplish that.