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Nathan Clute Comment On Regulatory Notice 22-08

Nathan Clute
N/A

Options typically trade at 10x or more leverage depending on strike price. Leveraged and inverse funds trade from 2x to 3x and do not expire. If investors are no longer allowed to use leveraged and inverse funds, they will simply trade options which are even riskier than leveraged funds. Additionally options often expire worthless. Banning leveraged and inverse funds simply signals to investors that the government would rather have them trade riskier derivative assets such as options, which makes little sense.