Personal Finance & Money Asked on December 5, 2020
Since these would help me manage risk in my personal financial portfolio, why are there no exchange traded options on 3x leveraged ETNs?
Is there a prohibition that the SEC is perpetuating? Is there an agreement amongst exchanges not to trade them? If the SEC is approving/disapproving these particular products, what authority is that based on?
I’ve anecdotally heard “too much leverage” before, but there are ways to get more leverage than options would provide and it also isn’t law (although the SEC has historically unparalled discretion over how ETFs and ETNs operate), so any insight into this would be great
Are you referring to a specific type of ETN? Because leveraged ETNs do exist: http://etf.about.com/od/etfbasics/a/List-Of-Etns.htm
Some examples of 3x leveraged ETNs:
UUPT (POWERSHARES DB 3X LONG US DOLLAR INDEX FUTURES)
BUNT (POWERSHARES DB 3X GERMAN BUND FUTURES)
DGLD (VS 3X INVERSE GOLD LINKED TO S&P GSCI GOLD)
See above list for more examples.
Answered by jlewkovich on December 5, 2020
It may be that exchanges don't perceive there to be enough trading interest to warrant the set up and running cost. I guess you would have to ask them...
Answered by ThatDataGuy on December 5, 2020
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