Frequently Asked Questions
How do Leverage Shares’ leveraged ETFs work?
About Us
Leveraged 2x Single Stock ETFs seek to provide two times (2x) the daily performance of a specific stock. For instance, if the underlying stock rises by 1% in a day, the ETF is designed to rise by 2%; similarly, if the stock falls by 1%, the ETF should fall by 2%, before fees and expenses.
Each ETF gains leveraged exposure through swap agreements with major financial institutions, which help allow the ETF to achieve its targeted daily exposure. By leveraging access to institutional pricing for swaps and trading, these ETFs are designed to be cost-efficient for investors.
Some of the most popular single stocks: TSLA & NVDA.
Experienced investors and market participants may use leveraged ETFs for a variety of strategies, including:
- Responding to technical indicators on individual stocks
- Amplifying returns when stocks are driven by momentum
- Trading the volatility and the directionality of individual stocks
- Positioning or responding to earnings and news announcements
Leverage Shares 2x Capped Accelerated ETFs seek to deliver roughly two times (2X) any positive share-price return of a single underlying stock over one full calendar-month “Outcome Period,” while matching the stock’s losses on a one-for-one basis. Gains are limited by an Approximate Cap that resets at the start of every month.
Some of the market’s most actively traded names: COIN, MSTR, NVDA, PLTR, and TSLA.
Trading Our Leveraged ETFs
The ETFs will be listed on major US exchanges such as Nasdaq & Cboe, making them available for trading through most major brokers.
There is no minimum holding period, but the ETFs are intended for daily trading or very short-term positions due to the compounding effects of leverage over time.
The 2x exposure resets daily. This means the performance of the ETF is tied to the daily percentage change of the underlying stock. Holding the ETF for longer than a day can lead to returns that differ significantly from 2x the cumulative return of the stock due to compounding.
These ETFs carry significant risks, including:
- Amplified losses: Losses are magnified in line with the leverage.
- Compounding effects: Over time, returns may diverge from the expected 2x performance due to market volatility.
- Market volatility: Higher sensitivity to price swings of the underlying stock. Investors should consult the prospectus and understand the risks fully before investing.
The management fee for the ETFs is 0.75% annually. Additional costs, such as swap financing and transaction fees, are detailed in the prospectus.
No. Losses are limited to the initial investment.
- Daily Leveraged ETFs
There is no minimum holding period, but the ETFs are intended for daily trading or very short-term positions due to the compounding effects of leverage over time. - Capped Accelerated ETFs
The strategy is built for investors who enter before an Outcome Period begins and stay through the month-end close; entering or exiting mid-period can materially alter results.
On the last trading day of each month the fund unwinds its expiring options and establishes a new synthetic structure. A fresh Approximate Cap — published on the website after the close — applies to the next month.
- Full downside exposure: the fund tracks 1x losses of the stock with no downside buffer.
- Cap risk: once the Cap is reached, further stock gains do not increase fund value.
- Timing risk: buying after the Cap is partly used or selling early can leave investors with muted upside and full downside.
- Derivatives & counterparty risk: performance depends on option pricing, clearing-member health, and swap counterparties.
- High transaction costs & new-fund risk: options are rolled monthly; the funds are newly organized and have no operating history.
Each fund charges an annual management fee currently proposed at approximately 0.75%; there are no 12b-1 fees. Standard brokerage commissions, creation/redemption fees, and option-rolling costs are separate.
Scenarios
A stock split or reverse stock split on the underlying stock will not affect the total value of your investment in the leveraged ETF. The ETF’s holdings and swap exposure will be recalibrated to maintain the target leverage ratio.
Once the Cap is hit, the fund’s price levels off even if the stock keeps rallying; upside beyond that point is foregone until the next Outcome Period begins.
You may enter when part of the Cap is already used or when downside exposure is larger than remaining upside, potentially leading to returns very different from the advertised 2x/Cap profile.