Hello, I am writing in regards to regulatory notice #22-08.
Please do not restrict access to leveraged ETFs. I am just a retail trader trying to compete in the markets the best way I can. I do not have access to swaps or private markets or high speed low latency connections to exchanges like big institutional traders do so I have to make do with what I have available. Leveraged and inverse ETFs help level the playing field for me. I like using them, I understand them well, and they are an integral part of my trading strategy for hedging my overall portfolio as well as tools to best take advantage of trading opportunities day to day.
Leveraged ETFs, unlike options, typically have very low spreads, are highly liquid, do not have downsides like time decay and impending expiration dates so options are no substitute; leveraged ETFs are much safer. Daily rebalanced leverage is an enforced responsible method of reducing notional value as the market falls, avoiding the possibility of margin call that a trader would be exposed to with traditional non-managed leverage. Compared to the futures market, leveraged ETFs are available on a lot more underlying assets, exist in most normal brokerage accounts, and have much smaller share/contract sizes making it easier for small retail traders to take part.
In short, leveraged ETFs are very important to small traders like me, there is no good substitute, and I along with other people like me would be very disadvantaged if access were restricted. Thank you for your time.
Nathan Smith Comment On Regulatory Notice 22-08
Hello, I am writing in regards to regulatory notice #22-08.
Please do not restrict access to leveraged ETFs. I am just a retail trader trying to compete in the markets the best way I can. I do not have access to swaps or private markets or high speed low latency connections to exchanges like big institutional traders do so I have to make do with what I have available. Leveraged and inverse ETFs help level the playing field for me. I like using them, I understand them well, and they are an integral part of my trading strategy for hedging my overall portfolio as well as tools to best take advantage of trading opportunities day to day.
Leveraged ETFs, unlike options, typically have very low spreads, are highly liquid, do not have downsides like time decay and impending expiration dates so options are no substitute; leveraged ETFs are much safer. Daily rebalanced leverage is an enforced responsible method of reducing notional value as the market falls, avoiding the possibility of margin call that a trader would be exposed to with traditional non-managed leverage. Compared to the futures market, leveraged ETFs are available on a lot more underlying assets, exist in most normal brokerage accounts, and have much smaller share/contract sizes making it easier for small retail traders to take part.
In short, leveraged ETFs are very important to small traders like me, there is no good substitute, and I along with other people like me would be very disadvantaged if access were restricted. Thank you for your time.