10.05.2024 Upcoming Corporate Actions

Аватар на автора



Five Leveraged ETP Features

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Leverage has been around for years and there are many types of leveraged instruments available today – from futures to certificates – listed on exchanges around the world. Not to mention CFDs, which have become very popular over the past decade, despite not being listed and trading over-the-counter (OTC).

ETPs are an alternative to these leveraged products and do not require opening a margin account. Although ETPs are risky investment products, their risk is limited to the amount invested, unlike CFDs or futures contracts.

Due to the combined characteristics of leverage and daily compounding returns, this type of trading instrument can improve returns and are a secure, transparent, and profitable trading tool.

As a provider of leveraged ETPs through our Leverage Shares product line, we want investors to clearly understand how these products work prior to investing or speculating with them.

    1.     The advantage derived from leverage allows an investor to amplify the returns of an asset

( both positive and negative).

For example, let’s assume you invest in an ETP that tracks the Facebook, Inc. (FB) stock and offers a leverage factor of 2 (FB2). When the Facebook share increases by 1% during a trading day, your ETP (FB2) will increase by 2% (excluding fees and adjustments*).
Conversely, if the value of Facebook drops by 1% on any given day, ETPs offering 2x exposure will lose 2%, respectively.

    2.     Leveraged products allow investors to either use less capital to reach the desired level of

exposure, or to increase their exposure by using the same amount of capital.

In the case of an ETP with 2x leverage, you would actually invest only half of the total exposure desired.
How? For example, if an investor purchases $100 of a 2x leveraged ETP, he receives $200 exposure consisting of $100 invested and $100 of borrowed funds (at the benchmark market funding rate + 1%) to make a total investment of $200.

The cost of borrowing is deducted from the daily return and is included in the calculation of the ETP’s price (with other fees and adjustments*).

If an investor buys $100 of a 2x ETP on a share, $200 of the shares are bought on the reference stock market because Leverage Shares ETPs offer physical replication.

    3.     There is a reason why the providers of ETPs integrate a rebalancing mechanism (which is

generally daily).

Leveraged ETPs seek to provide a fixed multiplier (i.e. leverage factor) compared to the performance of their benchmark over a given period. This period is usually one day. This means that leveraged ETPs must rebalance their leverage at the end of each trading day to ensure that they offer investors the same leverage every new trading day.
Over time, this can lead to extreme results (for example, exposures well above the stated leverage). Since ETPs are open-ended and can be created and traded on a daily basis, daily rebalancing allows investors to buy and sell the ETP on any date and receive the leverage expected.

    4.     The compounding effect must be taken into account for ETPs held for periods of more than one

day and can have both negative and positive effects.

Let’s take a scenario where Facebook, Inc.’s stock is moving up and down with no clear trend. You now know that if the Facebook share price is $100 and increases by +5%, your 2x Facebook Leverage ETP (FB2) will increase by +10%, to reach $110 (excluding fees and adjustments *).
But the next day, if Facebook’s stock drops -5%, the ETP will fall to $99. Over two days, the Facebook share would post an average return of 0% and a price of $99.75, resulting from a two-day compounded return of -0.25%. While you would expect a return on the ETP equal to twice that of the stock (or -0.50%), the return on the ETP compounded over two days will be -1.00%.

Now take a scenario where Facebook’s stock is trending upwards, reporting +5% on each of two consecutive days. $100 invested in Facebook shares earns $5 on the first day and $5.25 on the second day, with an end-of-period value of $110.25 (representing a return of 10.25% over the two days). Our 2x Facebook ETP would have brought in $10 on the first day, then $11 on the second day, for a compound price of $ 121.00, therefore a return of 21.00% over two days.
Daily rebalancing produces “compounding” returns, which can have either a positive or negative impact. The magnitude of this daily compounding effect depends on the length of the ETP holding period, the volatility of the security, and the amount of leverage used.

    5.     Utilization and trading strategies

Leveraged ETPs can be used by a wide range of investors and for many different trading strategies:

    a.     Double the daily return of a strategy, positively or negatively (excluding fees and adjustments*).
    b.     Cover existing positions with a single transaction, requiring less capital tied up.
    c.     CFD providers can cover the risks of their products using Leverage Shares ETPs.
    d.     Use in a pair trade to take advantage of undervalued assets.
    e.     Use in short term or intraday strategies.

ETPs are available via most brokers and are listed on the London Stock Exchange. Follow us on social media to be informed of new products to come.

More information about our ETPs is available on:




*the fees are 0.75% pa of management fees + 1% pa of margin fees, i.e. 1.75% pa in total.
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Share this:

Related Products:

Related Products:

Related Articles

Market conditions prime SVLT for outperformance against the Nasdaq-100
Market conditions prime SVLT for outperformance against the Nasdaq-100
Market conditions prime SVLT for outperformance against the Nasdaq-100

Required Information

Upcoming Webinar

Technical Analysis Strategies for Successful Trading

by Violeta Todorova

3.00 PM GTM+1

Welcome to Leverage Shares

Terms and Conditions


If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.

If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.

Risk Warnings

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.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

United States Visitors

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area

Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.

Leverage Investment

Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.


Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2. 

By clicking you agree to the Terms and Conditions displayed.