Leveraged ETFs: A Curious Case

These are leveraged ETFs, and they operate on a principle that, while not exactly arcane, is best approached with a degree of cautious skepticism. You can find them offered by firms like Leverage Shares, Direxion, and ProShares. Historically, they’ve tended to latch onto broad market indices, like the S&P 500, offering products like the Direxion Daily S&P 500 Bull 3X Shares (SPXL +2.06%). Though, in a display of typical financial ingenuity, they’ve expanded to encompass sectors – ProShares Ultra Financials (UYG +1.41%) being a prime example – and, rather astonishingly, even individual stocks. There’s a 2X Long OPEN Daily ETF (OPEG +14.52%) tracking Opendoor Technologies, for goodness sake! They’ve even managed to create ETFs based on volatility itself – the 2x Long VIX Futures ETF (UVIX 4.53%) – which feels a bit like trying to bottle smoke.







