I have used ProFunds for over 20 years now. Proshares inverse and leveragedlong funds have been around a long time and they give me the flexibility to do what I want and invest how I want and they are neat and beneficial and provide clear and non-dangerous opportunities to invest, hedge, and participate in many indexes and sectors of the market. I have helped run a hedge fund that could use short positions where we could use up to 200% short positions if we wanted to (Shoreline Fund, 2007-2011) but using 1/1 and 2/1 funds and inverse funds was much better than regular long or short positions because your downside is not unlimited as with a short position and your upside potential would grow as the market would go your way. In this manner, we were able to do quite well and for several years running, we were ranked as one of the best hedge funds in the country, in terms of risk versus reward, because we had the flexibility to invest how we saw fit and 1/1 and 2/1 funds were part of our arsenal. I would therefore suggest that 1/1 and 2/1 funds are completely and thoroughly untouchable by any regulation at all and are completely necessary for my investments, my family's investments, as well as our retirement funds and I know many acquaintances, friends, and family members who use these funds very responsibly. I will concede here and nowthat if you are going to regulate anything, that 1/1 and 2/1 funds should be completely left alone, with the exception of funds that are based on front-month futures contracts like VIXY, where if you compare how VIXY has done vs. its so-called underlying (the VIX itself) for the past few years, you can see a huge rounded bottomand a turn north in VIX, and thus if you are long the VIX from 2 years ago, all of your capital has pretty much stayed intact at 30 dollars, whereas VIXY, based on front-month futures on the VIX, which is just a 1/1 long VIX fund, has completely bled away investment dollars over time (VIXY was 147 two years ago at the peak and is now at 20.18!, even while the underlying stayed well intact). So anything based on futures is fair game and quite questionable on your part and I would also say anyone using 3/1 funds with margin may be scrutinized if you so choose to make sure they qualify. These are leveraged at 3 times of course but if you throw in margin, their invested funds can go up in smoke in just a 15-20% move against them so cap these at no margin possibly. In general, leveraged and inverse funds of the standard variety (no futures base) should not be scrutinized at all but if you want to look into something, look into the options market and do something about all of the losses that occur there because of expirations that eliminate your money in no time flat. I have seen studies by Sentimentrader.com on all the stimulus money that got completely blown up in the options market where amateur and novice traders took stimulus checks and bought 1-week options and they completely gambled away billions upon billions of dollars and this occurred not just in the last 2 years but ever since the options market started. And I could make the case that our economy is now suffering with negative GDP because stimulus checks went up in smoke in options when they should have gone to help stimulate the economy! 90% of traders lose money and I believe in the options market, these numbers are much higher. Options should be for professionals and those investors who go through rigorous testing and those who are hedging underlying positions only. 1-week options should be completely eliminated and 1-month options should be for pros and hedgers only. As Robert Prechter at Elliott Wave International said in a webinar on options many decades ago, "options are designed to separate you from your money." I did not believe it when i heard this some 25 years ago but I blew through a lot of money and it was a hard lesson to learn so if you want to regulate something and require testing and scrutiny in an area, go after the options markets where money can just go up in smoke in a day to a week to a month with complete 100% losses over and over and over again At least an inverse or long fund can keep you invested and retain some to most of its value if the market goes against you awhile and you thus still have a chance to profit or at least end up getting your money back, whereas with options, you might as well be at the roulette table in Vegas. And speaking of gambling in options, go after and regulate the crypto market where gambling goes on 24 hours a day in underlying junk that has little to no value. Please leave standard, non-futures based funds and inverse funds completely alone. Thanks for your time.
Michael Boysen Comment On Regulatory Notice 22-08
I have used ProFunds for over 20 years now. Proshares inverse and leveragedlong funds have been around a long time and they give me the flexibility to do what I want and invest how I want and they are neat and beneficial and provide clear and non-dangerous opportunities to invest, hedge, and participate in many indexes and sectors of the market. I have helped run a hedge fund that could use short positions where we could use up to 200% short positions if we wanted to (Shoreline Fund, 2007-2011) but using 1/1 and 2/1 funds and inverse funds was much better than regular long or short positions because your downside is not unlimited as with a short position and your upside potential would grow as the market would go your way. In this manner, we were able to do quite well and for several years running, we were ranked as one of the best hedge funds in the country, in terms of risk versus reward, because we had the flexibility to invest how we saw fit and 1/1 and 2/1 funds were part of our arsenal. I would therefore suggest that 1/1 and 2/1 funds are completely and thoroughly untouchable by any regulation at all and are completely necessary for my investments, my family's investments, as well as our retirement funds and I know many acquaintances, friends, and family members who use these funds very responsibly. I will concede here and nowthat if you are going to regulate anything, that 1/1 and 2/1 funds should be completely left alone, with the exception of funds that are based on front-month futures contracts like VIXY, where if you compare how VIXY has done vs. its so-called underlying (the VIX itself) for the past few years, you can see a huge rounded bottomand a turn north in VIX, and thus if you are long the VIX from 2 years ago, all of your capital has pretty much stayed intact at 30 dollars, whereas VIXY, based on front-month futures on the VIX, which is just a 1/1 long VIX fund, has completely bled away investment dollars over time (VIXY was 147 two years ago at the peak and is now at 20.18!, even while the underlying stayed well intact). So anything based on futures is fair game and quite questionable on your part and I would also say anyone using 3/1 funds with margin may be scrutinized if you so choose to make sure they qualify. These are leveraged at 3 times of course but if you throw in margin, their invested funds can go up in smoke in just a 15-20% move against them so cap these at no margin possibly. In general, leveraged and inverse funds of the standard variety (no futures base) should not be scrutinized at all but if you want to look into something, look into the options market and do something about all of the losses that occur there because of expirations that eliminate your money in no time flat. I have seen studies by Sentimentrader.com on all the stimulus money that got completely blown up in the options market where amateur and novice traders took stimulus checks and bought 1-week options and they completely gambled away billions upon billions of dollars and this occurred not just in the last 2 years but ever since the options market started. And I could make the case that our economy is now suffering with negative GDP because stimulus checks went up in smoke in options when they should have gone to help stimulate the economy! 90% of traders lose money and I believe in the options market, these numbers are much higher. Options should be for professionals and those investors who go through rigorous testing and those who are hedging underlying positions only. 1-week options should be completely eliminated and 1-month options should be for pros and hedgers only. As Robert Prechter at Elliott Wave International said in a webinar on options many decades ago, "options are designed to separate you from your money." I did not believe it when i heard this some 25 years ago but I blew through a lot of money and it was a hard lesson to learn so if you want to regulate something and require testing and scrutiny in an area, go after the options markets where money can just go up in smoke in a day to a week to a month with complete 100% losses over and over and over again At least an inverse or long fund can keep you invested and retain some to most of its value if the market goes against you awhile and you thus still have a chance to profit or at least end up getting your money back, whereas with options, you might as well be at the roulette table in Vegas. And speaking of gambling in options, go after and regulate the crypto market where gambling goes on 24 hours a day in underlying junk that has little to no value. Please leave standard, non-futures based funds and inverse funds completely alone. Thanks for your time.