Zachary Sherman Comment On Regulatory Notice 22-08
Zachary Sherman
N/A
Comments: I do believe having transparency is important. Regulators have done great things in the past to clarify concepts that a layman does not interact with regularly. Thanks to regulators, banks have to disclose APR's with clients, ensuring that the risks are fully understood. However, I feel that this level of scrutiny is unwarranted, biased, exclusionary, and has an unfair impact on the retail investor. Every investment product has risk. It is made abundantly clear. Leveraged products are no different. It should be expected that an investor understands what they are buying into. By limiting access to these types of products it drives retail investors away from them, leading to an even deeper lack of understanding. Additionally, it limits the ability of retail investors to understand the market and carve out something for themselves. This is an offensive idea. It comes across as more big guys trying to push the smaller kids out of their play pens. Limiting the avenues that lower class citizens can attain wealth only deepens the class divide.
The concept of a 'cool down period' also strongly limits the trading options that an investor has and may potentially leave them in a worse state. If a perfect opportunity to buy presents itself, but I'm stuck in a 'cool down' because I supposedly don't know what I'm doing, I miss out. My American dream is stripped from me. I fully understand that Leveraged funds are short term products. I understand that they attempt to replicate gains and losses on a magnified scale. I understand that they use derivatives and debt to do this. In theory anyone could attempt to do that themselves buy writing options, but the chance of a retail investor actually achieving that with the tools we have is 0. The leveraged ETF gives us the ability to play the same game as our bigger peers.
Currently, my brokerages make it abundantly clear that leveraged products are leveraged and pose substantially more risk than their underlying asset. It also indicates that they have higher margin requirements. Each of my brokerages displays a warning above the stocks graphs. The only thing I can think to improve upon this is maybe just including that they are not intended for long term gains. A reasonable person would understand the risk associated. Further restrictions are unnecessary and biased.
This may not seem like much to you all, but it's a very big deal to me and many of my peers. We rely on these tools to better our lives. It's heartbreaking to see them ripped from us, one by one.
Zachary Sherman Comment On Regulatory Notice 22-08
Comments: I do believe having transparency is important. Regulators have done great things in the past to clarify concepts that a layman does not interact with regularly. Thanks to regulators, banks have to disclose APR's with clients, ensuring that the risks are fully understood. However, I feel that this level of scrutiny is unwarranted, biased, exclusionary, and has an unfair impact on the retail investor. Every investment product has risk. It is made abundantly clear. Leveraged products are no different. It should be expected that an investor understands what they are buying into. By limiting access to these types of products it drives retail investors away from them, leading to an even deeper lack of understanding. Additionally, it limits the ability of retail investors to understand the market and carve out something for themselves. This is an offensive idea. It comes across as more big guys trying to push the smaller kids out of their play pens. Limiting the avenues that lower class citizens can attain wealth only deepens the class divide.
The concept of a 'cool down period' also strongly limits the trading options that an investor has and may potentially leave them in a worse state. If a perfect opportunity to buy presents itself, but I'm stuck in a 'cool down' because I supposedly don't know what I'm doing, I miss out. My American dream is stripped from me. I fully understand that Leveraged funds are short term products. I understand that they attempt to replicate gains and losses on a magnified scale. I understand that they use derivatives and debt to do this. In theory anyone could attempt to do that themselves buy writing options, but the chance of a retail investor actually achieving that with the tools we have is 0. The leveraged ETF gives us the ability to play the same game as our bigger peers.
Currently, my brokerages make it abundantly clear that leveraged products are leveraged and pose substantially more risk than their underlying asset. It also indicates that they have higher margin requirements. Each of my brokerages displays a warning above the stocks graphs. The only thing I can think to improve upon this is maybe just including that they are not intended for long term gains. A reasonable person would understand the risk associated. Further restrictions are unnecessary and biased.
This may not seem like much to you all, but it's a very big deal to me and many of my peers. We rely on these tools to better our lives. It's heartbreaking to see them ripped from us, one by one.