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Any EFT that is leveraged has decay. These funds are meant to be day traded, not held for a year.

Here is a quick explanation:


Rather than banning the purchase of ultra- and ultra-short funds, the brokerage firms should allow people to short them (most firms don't allow that). Shorting FAZ, for example, would have been highly profitable.


Bespoke, you incompetent morons, why in the hell are you cheerleading those who want to ban leveraged ETFs? Leveraged ETFS are BRILLIANT for those who know how to use them properly.

Of COURSE you're not supposed to hold them for more than a few days! That hardly means they require legal protections.

Months-long graphs like the ones you show here only prove that you're intentionally trying to mislead people about their performance, and trying to cheerlead lawmakers into believing that leveraged ETFs need to be made unavailable to ordinary investors like myself, and that only Wall Street types like yourselves have the knowledge required to use them properly.

What absolute garbage!

You ought to be ashamed of yourselves for this fallacious and misleading argument which would remove one of the most powerful tools investors have.

You can have my leveraged ETFs when you pry them from my cold, dead TD Ameritrade account.


shorting Faz would have wiped you out if you did it in any size. why can't people understand the idea of delta.


These babies are great for swing traders like me...if only we had these back in 2000

Paul Hickey

I don't think anyone was cheerleading. The article only pointed out that these ETFs have a lousy record of tracking their underlying indices on a long-term basis. Additionally, the fact that some firms are banning trading in them will lead to less liquidty. Investors should know that.
These securities do not accomplish anything that an investor with a margin account or options account can't already accomplish. While they do allow investors to use leverage where they otherwise couldn't (cash accounts,IRAs, etc), a much better solution would be to make the rules the same across the board.


No,with leverage etf your pre paying the risk.A margin account you will pay after the fact ,an may have to sell something to cover the call... on options you have to deal with the P.T.E.,for swing trading these babies work just fine

Jim Fellows

TBT is up over 44% this year. It will likely be banned in wrap accounts at these firms and others. An obvious trade that worked quite well over multiple months. This is an outcome, just like the end of the "Merril Rule" ending fee in lieu of commission, that allegedly helps clients but actually hurts them.

The regulators will always be morons, and cater to the morons. This works out poorly for anyone with a brain.

Next on the agenda, banning ALL commodity etfs [long and *gasp* short]. Contango is too complicated for investors to handle.


If you could collect income from your neighbor's house without owning it, that would be tough to give up.
Same for a brokerage on margin interest.

Diago Echeverri


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