Tradr ETFs Announces Leverage Increases Now in Effect for SARK, TSLQ and NVDS
Tradr ETFs has increased leverage factors for three inverse ETFs, renaming them accordingly:
- SARK: Tradr 2X Short Innovation Daily ETF (from -1X to -2X leverage on ARKK)
- TSLQ: Tradr 2X Short TSLA Daily ETF (from -1X to -2X leverage on TSLA)
- NVDS: Tradr 1.5X Short NVDA Daily ETF (from -1.25X to -1.5X leverage on NVDA)
These changes aim to provide more powerful tools for sophisticated investors seeking to amplify high-conviction views. However, the increased leverage also heightens investment risks. Tradr ETFs emphasizes that these products are designed for short-term trading and active portfolio management, not suitable for all investors.
- Increased leverage factors provide more powerful tools for sophisticated investors
- Potential for amplified returns on high-conviction views
- Enhanced product offerings may attract more traders and active investors
- Heightened investment risks due to increased leverage
- Products are only suitable for short-term trading and active management
- Increased volatility and potential for significant losses
Insights
Tradr ETFs has increased the leverage factors on three of its inverse ETFs, which can significantly impact both the ETFs' performance and the associated risk profile. Leverage in ETFs essentially means using borrowed capital to increase potential returns, but it also amplifies potential losses. This move changes the leverage factors from -1X to -2X for SARK and TSLQ and from -1.25X to -1.5X for NVDS.
For retail investors, this change means higher potential returns if the associated underlying assets (ARKK, TSLA, NVDA) decrease in value. However, it's important to note that these products are designed for short-term trading, often on a daily basis, which aligns with the nature of leveraged and inverse ETFs. The performance over longer periods can diverge significantly from the benchmark, making them unsuitable for long-term investments.
Another aspect to consider is the increased volatility. Leveraged ETFs can experience drastic price swings, even more so in highly volatile stocks such as Tesla and Nvidia. This can be a double-edged sword, providing substantial gains or severe losses depending on market movements.
In summary, this change could be seen as a positive development for sophisticated investors looking to capitalize on short-term market movements. However, the heightened risk and need for active management make these ETFs a poor fit for conservative investors or those not closely following market trends.
Increasing leverage on the Tradr ETFs aligns with current trends where active traders and sophisticated investors seek tools to maximize gains, especially in volatile markets. The ETFs target high-profile stocks like ARKK, Tesla and Nvidia, which are often subject to significant price fluctuations.
For retail investors, understanding the implications of leverage is critical. Leveraged ETFs are designed to provide amplified exposure to daily price movements of their underlying assets. This can be particularly beneficial in a market downturn for inverse ETFs, where investors profit from declines. However, the compounding effect can lead to unexpected results if held for longer than one trading session.
Considering the liquidity of these ETFs, the decision to increase leverage might attract more trading volume, enhancing liquidity further. This could benefit investors by providing tighter bid-ask spreads and easier entry and exit points. However, the key trade-off remains the amplified risk, making these products unsuitable for passive investors or those with lower risk tolerance.
Ultimately, while the additional leverage offers increased potential rewards, it also comes with proportionate risks. Investors must weigh their risk appetite and trading style before incorporating these leveraged ETFs into their strategies.
Highly liquid inverse ETFs from category pioneer now provide additional short exposure to ARKK, Tesla and NVIDIA, giving sophisticated investors more powerful tools
The names of each of the three ETFs have been revised accordingly, with the key details as follows:
TICKER |
PREVIOUS FUND NAME |
NEW FUND NAME |
UPDATED LEVERAGE FACTOR |
TARGET
|
SARK |
Tradr Short Innovation Daily ETF |
Tradr 2X Short Innovation Daily ETF |
-1X to -2X |
ARKK |
TSLQ |
Tradr TSLA Bear Daily ETF |
Tradr 2X Short TSLA Daily ETF |
-1X to -2X |
TSLA |
NVDS |
Tradr 1.25X NVDA Bear Daily ETF |
Tradr 1.5X Short NVDA Daily ETF |
-1.25X to -1.5X |
NVDA |
“Traders are always looking for more efficient uses of their capital in order to amplify high conviction views,” said Matt Markiewicz, Head of Product and Capital Markets at Tradr ETFs. “To that end, we are pleased to increase leverage on these three high-profile pioneering products. Over the coming months we will look to redefine how investors use leverage in their quest to magnify returns.”
For detailed information on Tradr ETFs and the significant risks involved with leveraged and inverse ETFs, please visit www.tradretfs.com.
About Tradr ETFs
Tradr ETFs are designed for sophisticated investors and professional traders who are looking to express high conviction investment views. The strategies include leveraged and inverse ETFs that seek short or long exposure to actively traded stocks and ETFs.
IMPORTANT RISK INFORMATION
The changes will heighten the risk of any investment in a Fund because they will result in an increase in the Fund’s leverage.
The significant risks of leveraged and/or inverse ETFs include the risks of leverage, derivatives, and/or other complex investment strategies that they employ. These investments are designed for short-term or intraday trading for investors seeking daily leveraged investment results. Investors in the fund should: (a) understand the risks associated with the use of leverage; (b) understand the consequences of seeking daily leveraged investment results; (c) intend to actively monitor and manage their investment. Fund performance will likely be significantly different than the benchmark over periods longer than one day and the performance may trend in the opposite direction than their benchmark over periods other than one day.
The Funds seek daily leveraged investment results and are intended to be used as short-term trading vehicles. The Funds pursue daily leveraged investment objectives, which means they are riskier than alternatives that do not use leverage because the Funds magnify the performance of their underlying security. The volatility of the underlying security may affect a Fund’s return as much as, or more than, the return of the underlying security.
The Funds are not suitable for all investors and should be used only by knowledgeable investors, such as traders and active investors employing dynamic strategies, who intend to use them for short-term or intraday trading to seek daily leveraged investment results and who understand the consequences of seeking leveraged and inverse investment results, including the impact of compounding on Fund performance. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively monitor and manage their portfolios. The Fund is very different from most mutual funds and exchange traded funds. The Fund is not a complete investment program.
ETFs involve risk including possible loss of principal. There is no assurance that the Fund will achieve its investment objective. Principal risks and other important risks may be found in the prospectus.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds. This and other important information about the Fund is contained in the Prospectus, which can be obtained by visiting www.tradretfs.com. The Prospectus should be read carefully before investing.
Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments or its Tradr ETFs. AXI000506
View source version on businesswire.com: https://www.businesswire.com/news/home/20240715058430/en/
Media:
Chris Sullivan
Craft & Capital
chris@craftandcapital.com
Source: Tradr ETFs
FAQ
What changes did Tradr ETFs announce for SARK, TSLQ, and NVDS?
How does the leverage increase affect the risk profile of SARK and other Tradr ETFs?
What is the new leverage factor for SARK after the announced changes?
Are Tradr ETFs like SARK suitable for long-term investors?
