I am a Financial Advisor with LPL Financial and have been in the business for over 30 years. I have been using Proshare inverse ETFs with client portfolios purely as a hedge in accordance to LPL firm guidelines and limitations. My clients are generally pre-retired or retired folks, none of whom one would categorize as super rich. I comply with firm requirements and limitations related to the use of inverse ETFs. I respect the nature of the eroding values of options of the underlying contracts within the ETFs and therefore use them accordingly holding these positions only for as long as they are deemed beneficial in the context of the broader markets. The set time limits for holding Proshares doesn't make any sense to me as the underlying contracts are constantly rolling into new contracts over time. If the ETF never rolled over the contracts, but all would expire and never be rolled over into new contracts, then the time limits for holding periods would then make sense; but such is not the case. A case in point - the Proshare UCO could have been purchase over two years ago at about $15 per share. The underlying sector has experience much volatility and the underlying assets have risen significantly; today these same shares trade over $170 - after two years! But the policy states an investor should never hold these longer than a month. And the "Complex Product" notifications we send to our clients say with certainty they will lose money over time. Clearly not always the case. Also giving these clients access to the crypto space in a well diversified, well managed approach can be very beneficial. As a hedging strategy, I greatly appreciate the availability of Proshares and similar securities for the benefits they provide for the purposes of hedging and diversifying portfolios of securities.
Brent Lyons Comment On Regulatory Notice 22-08
I am a Financial Advisor with LPL Financial and have been in the business for over 30 years. I have been using Proshare inverse ETFs with client portfolios purely as a hedge in accordance to LPL firm guidelines and limitations. My clients are generally pre-retired or retired folks, none of whom one would categorize as super rich. I comply with firm requirements and limitations related to the use of inverse ETFs. I respect the nature of the eroding values of options of the underlying contracts within the ETFs and therefore use them accordingly holding these positions only for as long as they are deemed beneficial in the context of the broader markets. The set time limits for holding Proshares doesn't make any sense to me as the underlying contracts are constantly rolling into new contracts over time. If the ETF never rolled over the contracts, but all would expire and never be rolled over into new contracts, then the time limits for holding periods would then make sense; but such is not the case. A case in point - the Proshare UCO could have been purchase over two years ago at about $15 per share. The underlying sector has experience much volatility and the underlying assets have risen significantly; today these same shares trade over $170 - after two years! But the policy states an investor should never hold these longer than a month. And the "Complex Product" notifications we send to our clients say with certainty they will lose money over time. Clearly not always the case. Also giving these clients access to the crypto space in a well diversified, well managed approach can be very beneficial. As a hedging strategy, I greatly appreciate the availability of Proshares and similar securities for the benefits they provide for the purposes of hedging and diversifying portfolios of securities.