Robinhooders Discover 3x Levered ETFs

Bugsy

Bugsy

The flood into the 3x levered Nasdaq ETF was even more aggressive if looking on a daily basis: according to Bloomberg, the $7.8 billion ProShares ETF attracted more than $1.5 billion in the past eight days, "the most for such a span since it began trading in 2010."

What's going on here? Well, in a nutshell it appears that Robinhood (and TikTok) traders - who as we wrote over the weekend continue to flood into short-dated, out of the money calls, and especially Apple "lottery tickets" in pursuit of the highest-levered momentum trades despite the recent Nasdaq correction they have now also discovered 3x levered ETFs.

Indeed, it appears that any trading instrument that allows the Gen-Z and Millennial generations to get rich as fast as possible with massive leverage (and even more theta) no matter how scary the final outcome, is now the preferred gambling "trading" strategy
More...

https://www.zerohedge.com/markets/robinhooders-discover-3x-levered-etfs
 
yogi_trader said:
I wonder how many of them understand that you are not supposed to hold them over a couple of days?
More...

I wonder if we will ever see a 33% drop to wipe out these 3x funds?

6d25Ekc.png


TQQQ is up 40% YTD despite the volatility.
 
cdcaveman said:
Before you know it alot of them will be getting that lesson
More...
Actually, if you are in a low vol environment with a some auto correlation, long term holds can work very well.

These products do terrible on an underlying that is volatile and doesn't trend. UNG and it's 3x leveraged ETN's were a great example of that.

On the flip side, in 2017 (low vol, trending environment for equities) SPY was up 20% while UPRO was up 73%. That is 3.6x what the underlying did.
 
You must log in or register to reply here.
Back
Top