What type of Investors are suitable for Leverage ETF?
- Particularly suitable for investors who believe that there will be a trend in asset prices and want to amplify returns through leverage
- Investors who do not want to take the risk of liquidation
- Investors who cannot track for a long time
To sum up: leveraged ETFs are suitable for most investors
Xiaoming is a BTC trader who wants to use leverage to amplify gains or go short to make money in a bear market. However, there is no time to monitor the market and worry about contract pinouts. At the same time, a series of processes such as collateralized borrowing in leveraged borrowing, borrowing assets, repayment of principal and interest, and prevention of liquidation, are somewhat complicated.
Leveraged ETF is what Xiaoming needs!
A leveraged ETF is an index fund that anchors changes in asset prices. Under the action of leverage, investors can make big gains and gain more profits, regardless of market fluctuations, without the need to borrow or repay, and no margin required, so that they will not liquidate positions!
In simple terms, a leveraged ETF is a leverage that does not require borrowing money, without margin and liquidation, as easy as trading a spot!
Suitable scenarios for Leveraged ETF :
Due to the leverage adjustment mechanism of the leveraged ETF, the most applicable market conditions are: unilateral market (or trend market). At this time, the performance and advantages of the leveraged ETF will be very obvious) However, under extremely volatile market conditions, leveraged ETF will cause more wear and tear.
Therefore, to reduce risk exposure, we must first make a correct judgment of the market price trend, and then pay attention to the direction of market fluctuations and whether it is a unilateral market.
Disclaimer: Leveraged ETFs are emerging financial derivatives. The above does not constitute investment advice. Please pay attention to risk control. Leveraged ETFs greatly reduce the risk of strong liquidation, but in extreme conditions, there will be risks of approaching zeroing and liquidation. Please pay attention to the difference between net value and price to avoid suffering losses.