SEC Approves 4x Leveraged ETFs, Dubbed ‘Market Crack’

The criminal organization called the “SEC” just approved 400% leveraged ETFs by a company called Forceshares. In spite of the fact that the roster of 3x ETFs have done nothing but bestow a purple form of grief onto the uninformed investor — our regulatory body felt it necessary to provide the market with 1920s style leverage — that decays overtime — because straight up margin isn’t risky enough, apparently.

A few things to note, via the S-1.

the Sponsor has no experience operating commodity pools

the Sponsor is “leanly staffed” and “relies heavily on key personnel to manage trading activities”

the success of a Fund depends on the ability of the Sponsor to accurately implement its trading strategies, and any failure to do so could subject the Fund to losses.

the Sponsor may have conflicts of interest, which may cause them to favor their own interests to your detriment…the Sponsor’s principals, officers or employees may trade futures and related contracts for their own accounts.

the Sponsor has limited capital and may be unable to continue to manage the funds if it sustains continued losses
the failure or insolvency of the Custodian for a Fund could result in a substantial loss of the Fund’s assets.

the Funds are not registered investment companies, so you do not have the protections of the 1940 Act.

The tickers symbols will be UP for 4x long SPX futs and DOWN for 4x short SPX futs.

“This is an innovation for people who are going to run the game, sit behind the table and deal the cards, and it’s going to be a really bad innovation for those who think they can buy it and juice up some of their returns,” said Sal Arnuk, a principal at Themis Trading. “This is market crack, and it concerns me.”

Let’s review the returns of the 3x ETFs over the past 3 years.

TQQQ +225%
RETL +108%
FAS +99%
UPRO +97%
URTY +57%
UGAZ -99%
LBJ -92%
RUSL -86%
SQQQ -84%
FAZ -76%
ERX -75%