Skip to main content

Roth Vann Comment On Regulatory Notice 22-08

Roth Vann
N/A

Many retail traders looking to invest in leveraged funds do not simply find the options menu in their brokerage app. Leveraged funds offer retail investors an easy and hands free alternative to margin that does not come with constant rebalancing. The knowledge needed to understand leveraged funds are much less than understanding how they are achieved. In comparison to options, leveraged funds are simple. They rebalance and aim to roughly track some other funds returns.

There is no convincing argument that there are more investors misusing leveraged funds than there are misusing options. There are many online users who do not understand options pricing and lose their money using much greater leverage than those provided by leveraged funds. In fact, leveraged funds are probably a safer alternative for these people who are looking to gamble on risky options.