Comments: I am a quant oriented investor. I have been using index based, 2x and 3x, long leveraged ETFs in my retirement account. I think these types of leverage isn't as complex, and should be allowed to trade. Simply put, they are really a form of expressing Kelly Criterion on an index in which it's long term performance and volatility is well understood by quantitative oriented investors. However, I only advocate trading of this particular group. There are other more sophisticated products that might have flaws that can be wiped out completely. However, they is not leverage itself, it is the volatility and long term performance. High beta funds can be as dangerous as leveraged ETFs. While market index can eventually bounce back and go higher, other types may never recover!
Stephen Lihn Comment On Regulatory Notice 22-08
Comments: I am a quant oriented investor. I have been using index based, 2x and 3x, long leveraged ETFs in my retirement account. I think these types of leverage isn't as complex, and should be allowed to trade. Simply put, they are really a form of expressing Kelly Criterion on an index in which it's long term performance and volatility is well understood by quantitative oriented investors. However, I only advocate trading of this particular group. There are other more sophisticated products that might have flaws that can be wiped out completely. However, they is not leverage itself, it is the volatility and long term performance. High beta funds can be as dangerous as leveraged ETFs. While market index can eventually bounce back and go higher, other types may never recover!