Posted 12/5/2023, 5:46:00 PM
SEC greenlights new 4X leveraged S&P 500 product, raising concerns
- New 4X leveraged S&P 500 ETN called MAX S&P 500 4X Leveraged Exchange Traded Note (ticker XXXX) launched, allowing massively leveraged bets on the index
- Comes after SEC previously blocked proposed 4X leveraged ETFs in 2017, but this is an ETN that may circumvent those rules
- Designed for very short-term trades by sophisticated investors, with warnings it is extremely risky
- Some criticize allowing such high, casino-like leverage, questioning if this is investing or gambling
- Leveraged ETFs growing in popularity, but this is the first 4X leveraged product; remains to be seen if more will follow