Lecture 5: Suitable Scenarios for Leveraged ETF

The best scenario for leveraged ETF is in single trend market (rise/fall) because of the existence of rebalancing mechanism. In such scenarios, the advantages of leveraged ETF are at their best play. But in fluctuation market (for example, rise and fall greatly), its advantages will be less prominent.

Leveraged ETF is suitable for investors with the following characteristics:

• Users who want to profit from the up market, also want to profit from the down market;
• Users who want to leverage your earnings;
• Users who have the ability to take risks, but do not want to take the risk of similar contracts.

Warning

Leveraged ETF is a tradable product that tracks three times the daily profit of underlying assets. Users shall pay attention to the gap between the actual net value of the product and the latest price when placing an order. If you put the order in the opposite direction, there is a risk that the price will approach zero in extreme conditions. This product subjects to the derivative with high risk. Please watch out the risk in investment.