The best scenario for leveraged ETF is in single trend market (rise/fall) because of the existence of rebalancing mechanism. In such scenarios, the advantages of leveraged ETF are at their best play. But in fluctuation market (for example, rise and fall greatly), its advantages will be less prominent.
Therefore, on the one hand, predicting the right market direction is important for reducing investment risks, on the other judging whether it is the single direction market trend is also key to leveraged ETF product.
Leveraged ETF is an emerging financial product. The content above does not constitute investment advice. Please watch out investment risks.
Leveraged ETF reduces the risks of liquidation, but in extreme conditions there’s possibility that the price will approach zero and be liquidated. Please pay attention to the difference between order price and net value, to avoid losses.