Short and Leveraged (S&L) ETPs are complex financial instruments which track the performance of an underlying asset, such as a single stock or commodity. They are designed to multiply the daily performance of the underlying tracked.
This means that their profit or loss each day is determined by how much the underlying asset has risen or fallen that day. S&L ETPs, as their name suggests, seek to deliver 2, 3 or even 5 times the daily performance of a given benchmark.
In pursuit of their daily investment objectives, S&L ETPs must rebalance their assets daily to offer the same leveraged or inverse exposure on the next day. This means that their returns over time are the product of a series of daily returns, and not the leveraged factor multiplied by the cumulative return of the underlying asset for periods greater than a day.
The daily ‘reset’ occurs at the end of each trading day (market close). As a result, S&L ETPs are an effective alternative to be traded on an intra-day basis. While they can be traded for longer periods, investors should bear in mind that gains and losses will be compounded over time. We explore this in more detail in part 4. dedicated to Compounding.
The S&L ETPs performance is calculated by multiplying the daily performance of the underlying asset by the leverage factor, less costs, and fees.
The daily performance is the change in price between the market close on one trading day and the market close on the next trading day. For instance, if the closing price is $100 on day 1 and on day 2 the closing price is $101, the daily performance of a 5x ETP is +5% because the price of the underlying has risen 1%.
Sandeep joined Leverage Shares in September 2020. He leads research on existing and new product lines, asset classes, and strategies, with special emphasis on analysis of recent events and developments.
Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.
Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.
Julian joined Leverage Shares in 2018 as part of the company’s primary expansion in Eastern Europe. He is responsible for web content and raising brand awareness.
Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.
For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.
Violeta joined Leverage Shares in September 2022. She is responsible for conducting technical analysis, macro and equity research, providing valuable insights to help shape investment strategies for clients.
Prior to joining LS, Violeta worked at several high-profile investment firms in Australia, such as Tollhurst and Morgans Financial where she spent the past 12 years of her career.
Violeta is a certified market technician from the Australian Technical Analysts Association and holds a Post Graduate Diploma of Applied Finance and Investment from Kaplan Professional (FINSIA), Australia, where she was a lecturer for a number of years.
Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.
He joined Leverage Shares from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.
Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.
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The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
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