Leveraged ETFs: Math Often Trumps Hype
The Tweet on the right below irresponsibly suggests that if SK Hynix shares double, as Cantor Fitzgerald's $300 target implies, a 2x leveraged fund like SKHA offers "magnified exposure" to that outcome. Assuming the stock doubles, the leveraged trade ETF sounds like easy money. However, even if Cantor is right and the stock doubles, the math behind leveraged ETFs does not guarantee the holder will earn 200%. In fact, it doesn't even guarantee positive returns. 2x Leveraged ETFs deliver twice the daily return of the underlying stock, not twice the annual return. Over time, the daily resets…
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