I am a retail investor and use leveraged ETFs for a portion of my portfolio. Before buying these leveraged ETFs, I did a significant amount of research to understand the risks. This included back testing how the funds would behave in different market and monetary conditions. I also read the prospectuses for the funds. All this information was available and provided sufficient information on the
Why would you prevent me from making investments of my own choosing. Markets go up and down. Inverse ETFs provide a way for my self-directed IRA to make gains when the market is going down. This year alone, my IRA is up while the general market (s&p, Nasdaq, Russel) are down. I couldn't have that performance without using inverse ETFs. I understand the risk of inverse and leveraged
The Anti-Money Laundering, Fraud and Sanctions section of the 2023 Report on FINRA’s Examination and Risk Monitoring Program (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
Leveraged/Inverse funds are very useful risk management tools for even the most common retail investors. To impose restrictions of any kind will limit retail investor options and leave only the privileged and institutional investors with the critical risk management tools.
The common retail investors should be able to choose the public investments that are right for you and your family.
Public
I should be able to choose investments that I deem appropriate for me. I primarily use inverse funds to hedge my fixed income portfolio. This enables me to collect interest on my investments while limiting downside exposure to my principal in a rising rate environment. Not having the ability to do so would unnecessarily cost me loss of principal. In addition, I also use inverse treasury funds as
Comments:
Leveraged and Inverse funds provide me with a unique capability to both hedge market risks and provide a balanced portfolio. As an individual investor, I understand the risks associated with these and other products.
The market is currently stacked against a small investor because the entry is regulated by experience and wealth (not behavior). For example, the day trade rule takes a
I am a retail investor and I invest in what might be considered "complex" products such as volatility ETFs and leveraged ETFs. I could simply trade futures contracts and replicate these strategies, however investing in ETFs that maintain those positions is easier. I am aware of the risks of these funds and investigate their strategies carefully before investing. In many cases,
Leveraged ETFs is the way for us to capture the upside of the market on small investment amount that we own. We can not be satisfied with risk less or 5% investment return product which may not be sufficient for our need. Also at the time of lows of the market it would be major blow to our strategies.
Since we own small amount and we completely rely on our constant monthly income our risk is more
FINRA correctly recognizes the rise of retail trading of complex products. However, this is characteristic of financial bubbles and euphorias. The problem is the systemic issues that led to this bubble in the first place (irresponsible monetary policy) - not the retail traders themselves
I use non-leveraged inverse ETFs from ProShares to hedge market risk. I have read the prospectus from
Generally, complex products as described in this notice should be available to individual investors ('retail') with some obligation on the brokerage to ensure the individual investor understands the structure and risks associated with the complex product. Some brokers do a very good job of this and others seem to just 'check the box'. I think it's
