Leveraged and inverse funds allow me to gain exposure to leveraged and short positions without having to take on leverage myself. I use inverse ETFs to hedge my long positions and to express a bearish view on the market. QQQ is down roughly 20% YTD, but I have been able to hedge my long stock positions and profit from this decline through the PSQ, the inverse of QQQ. I do not want to take on leverage myself, but enjoy the access to these strategies that inverse ETFs allow. I could gain exposure to downside moves through put options, but in my opinion this is a higher risk and more difficult trade to navigate compared to an inverse ETF. I understand the risks associated with inverse and leveraged ETFs, that they represent a daily exposure to the underlying, and that performance may deviate from the underlying if held over a longer time period. The decision to accept these risks is my own. Inverse and leveraged ETFs are a democratizing force in investing, and removing access to these ETFs would restrict smaller investors' ability to access strategies that are absolutely critical to protecting the value of their portfolios.
Bryce Sandberg Comment On Regulatory Notice 22-08
Leveraged and inverse funds allow me to gain exposure to leveraged and short positions without having to take on leverage myself. I use inverse ETFs to hedge my long positions and to express a bearish view on the market. QQQ is down roughly 20% YTD, but I have been able to hedge my long stock positions and profit from this decline through the PSQ, the inverse of QQQ. I do not want to take on leverage myself, but enjoy the access to these strategies that inverse ETFs allow. I could gain exposure to downside moves through put options, but in my opinion this is a higher risk and more difficult trade to navigate compared to an inverse ETF. I understand the risks associated with inverse and leveraged ETFs, that they represent a daily exposure to the underlying, and that performance may deviate from the underlying if held over a longer time period. The decision to accept these risks is my own. Inverse and leveraged ETFs are a democratizing force in investing, and removing access to these ETFs would restrict smaller investors' ability to access strategies that are absolutely critical to protecting the value of their portfolios.