US traders willing to stomach the risks of devastating losses in hopes of lucrative short-term gains can now double their bets on Tesla and Nvidia’s volatile stocks, as asset managers add new products to a market that has boomed despite negative returns.
These “leveraged” exchange traded funds are collections of securities that employ derivatives to amplify long or short returns. Asset managers are narrowing their scope to individual company names with the launch of single-stock leveraged ETFs.
Earlier this month, REX Shares and Tuttle Capital Management launched four ETFs to allow wagers on the price of electric-car company Tesla or chipmaker Nvidia in the form of an ETF wrapper. Two products offer double the daily amount that the stock prices go up, and the two other so-called inverse products that pay out double if the underlying stock prices fall. Losses are also double for traders betting the wrong way.