@Marc45 , also higher leverage means higher gamma squeeze exposure for the ETPs providers (high risk). **
And another important matter is, higher leverage means higher volatility that means more expensive is the derivative used (high cost).
** It would be interesting to see your the risk models. (Sorry, my professional defect talking louder. 
)
I do not think it is an higher risk for the ETP issuer… but for the Market Maker (Natixis).
Yes directly the gamma risk is for derivative issuer and not for the ETP issuer, but that means also a counterpart risk, for the investors and for the ETP issuer (reputational risk).
If a derivative issuer defaults or falls, the ETP issuer will be also affected by the lost of trust/transactions of the ETPs investors.
That why choosing a “strong” counterpart is always important, GS (not Goldman Sachs ) surely have done their homework (DD).
Having a SPV and being physically-backed help mitigating the counterpart risk. Some ETPs issuers also have an extra layer of protection, several derivatives providers for diversification.
But well it’s becoming too technical and maybe too boring for an retail investors’ forum.
Thanks a lot for sharing these recommendations. I am already experimenting with the product you have mentioned. But Scottish Mortgage Trust is a very different proposition as it offers exposure to non listed tech companies which is very difficult for small investors like me to get exposure to without it. I have a gut feeling that a 3x Scottish Mortgage ETP might not decay even in long term holdings and may result in creation of one of the best and long lasting ETP ever produced. As Scottish mortgage is having exposure to early stage but high growth companies hand picked by the trust manager for long term growth. Some of these companies may result in 100x returns over a decade or two.
With the SMT suggestion you gave me an idea.
→ What if there were also leverage/inverse ETPs on Ark ETFs? 
It would be an alternative to European investors that don’t have access to the Ark ETFs (due to UCITS/PRIIPs). I suppose that the European investors would appreciate that very much.
Hi @RLX
As you said, being physically-backed (or fully collateralised with a diversified collateral) help mitigating the counterpart risk.
Because I see you like going into details, this chart will show you how GraniteShares ETP are done.
Collateralised ETP Securities are backed with collateral, subject to eligibility criteria, to protect investors in event of default. The amount of collateral posted by the Swap Counterparty is held and valued by an independent custodian in a segregated account and is adjusted daily and reflects the collateralised ETPs’ change in value and in the outstanding number of securities. The Bank of New York Mellon SA/NV serves as the Swap Collateral Custodian.
FYI, we choose GraniteShares to be able to say GS and to compete with Goldman Sachs… and let’s see, maybe buying them at later stage 
Doing an European listed ETP that track popular US ETF is something which could be possible and we have already discussed this internally. The question is whether we have the right in terms of intellectual property.
In addition, an ETP can be invested in a UCITS fund or ETF… but an ETP itself is not UCITS compliant.
Nicely put. I couldn’t had written better. 
I think that is good that the investors understand where they are investing. It helps to avoid bad surprises in the future.
When you buy them, I even can be an investor with you to buy them.
You are “buying/selling” the ETF itself, not copying their portfolio. It’s like a “fund of funds”, you even can negotiate with them better terms, but there is a risk they like the idea and do it themselves without you.
Don’t worry about being UCITS-complaint, Ark ETFs are already non UCITS-complaint. And your ETPs are also non UCITS-complaint. 
this is something to be explored.
I will discuss about it with NY team on next weekly meeting
I like the idea !!
Did you like the videos on this page: FAANG ETPs ???
Be careful what you are saying 
I did those videos myself
And I am working to do the same kind of short animated videos for educational content
(By the way, my royalty for ideas is 1%. Or a good job opportunity. 
)
You should have a video’s disclaimer. “No popcorn provided.”
I will see it.
GraniteShares Team is growing and will grow again and again for sure.
If you are an Italian speaker, send me your CV right now 
We are also looking for content/analyst
arrfff… I put all the disclaimers but I forgot the popcorn one
Can you make a leveraged version for SMT x2/x3?
We can add SMT 3x to the request list for sure.
Just for you to know, I take into account all request done here on the T212 Forum and I pass it to our Head of Product. For sure, we will not be able to do everything (even if I would love to) but we will study all request
At GraniteShares, we believe that the best way to invest is to do it by following your convictions. GraniteShares’ role is to provide simple investment solutions that allow you to express your convictions on the financial markets.
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