SEC looking mto curb leveraged ETFs

[ScalperJoe]

Maybe on the confirm trade button there should be a popup that asks whether you understand what you're doing. After hitting the yes, maybe another popup should ask "Are you fucking sure?"

Question 1: Fidelity does it already! It doesn't make you confirm each time, only reminding you that you signed a disclaimer confirming you understand the risks associated with the product.

Question 2: Probably a good idea for newbie investors.

 

[eurusdzn]

Its a thing that moves thats all. How many reasons can and do cause outlier moves on individual stocks.? Lots aside from the quartely earnings. It must be risk control that is the danger/issue.
Gold margin calls, bond market liquidity issues, stock flash crashes where single ETfs and even Proctor Gamble print at 1, are just a few issues in play effecting etfs and any of us can be unlucky bagholders.

 

[StarDust9182]

There was a preliminary report that landed on my desk earlier this year that I can't find. Most likely the issue the SEC is worried about is much bigger. It was something about complaints from a large trader that some Exchange Traded products had very odd trading and volume stats and the implications for true market liquidity. It is that they are probably addressing.

 

[Sig]

There was a preliminary report that landed on my desk earlier this year that I can't find. Most likely the issue the SEC is worried about is much bigger. It was something about complaints from a large trader that some Exchange Traded products had very odd trading and volume stats and the implications for true market liquidity. It is that they are probably addressing.

I don't subscribe the WSJ so couldn't read the article and I don't want to be the jack@#s who comments on an article I didn't read, so I'll admit that StarDust9182's point might have been addressed in the article. However, the point is a good one. The SEC has the idea that when an ETF trades many times the volume of the underlying there are potential issues, and a leveraged ETF allows you to manipulate with 1/3 the assets.

 

[murray t turtle]

I don't subscribe the WSJ so couldn't read the article and I don't want to be the jack@#s who comments on an article I didn't read, so I'll admit that StarDust9182's point might have been addressed in the article. However, the point is a good one. The SEC has the idea that when an ETF trades many times the volume of the underlying there are potential issues, and a leveraged ETF allows you to manipulate with 1/3 the assets.

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I dont subscribe anymore, its NOT much of a paper compared to IBD[ IBD is known for 50 dma+ 200 day moving average.] Having said that i usually accept a gift of WSJ papers + enjoy Wall Street Journal newspaper, not online version .; not that thier 65 day movin average means much @ all LOL. Since the banks + ETF sellers ALL READY have a 555 or 777+/ approximate page prospectus-that is enough. Repeating pattern= that is enough regs, enough paperwork.

Like one SEC commenter said, people borrow more on thier houses than that. Sure a sideways slop chop trend can goof things up but that is true in a cash or 3X. Good points

 

[murray t turtle]

Sadly most consumer protection is aimed at those very same 18-22 year olds who are now 90 year olds (actually more late 70s plus) and who seem to have an appalling ability to make poor decisions and be taken advantage of. Millennials grew up with the internet, they don't get scammed by Nigerian princes or 3X funds. And I'm probably crazy, but I actually like a world where we don't put our 18-22 year olds at 20% risk of death, call me a "snowflake" all you want!
I've actually mostly given up trying to explain daily percentage return concept of leveraged and inverse funds to people on this board unless they're specifically asking to learn about it. Not only do most refuse to get it, they actually get antagonistic about their incorrect understanding of it as well. I realize that ET is a low bar, but if the vast majority of people here seem be incapable of understanding a fundamental concept of these funds then perhaps they should be restricted to accredited investors.

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Good points, Sig NOT that N princes + 3X are equal.NOT even close,to being equal, but overall good points. Probably the real shocker is how few read the [ 555+/ page or 777+ page] prospectus or any prospectus.LOL Some one asked '' does that mean 555+ 1 ??'' I said no- that means 555 pages plus or minus.