Help understanding Leveraged shares

🤝 Help
1

Hi All, I know this question has been done to death but i can’t seem to find a single source of truth for the answers I’m looking for, so, thought maybe someone could help me out here please.

  1. Someone recently corrected me on my knowledge of Leveraged shares and the currencies they are found in. Can someone please explain how an instrument like, say, BERK shows its price in GBP with an underlying USD asset? Is it mid-market FX rates or something else that Leveraged shares does to provide the GBP trading price?

  2. What is the fundamental difference between Leveraged shares products and Graniteshare products? e.g. 3TSL and 3LTP. Feel free to treat me like a dummy, I’d prefer clarity over assumptions.

Thank you

1 Like
2

You’re best looking on the website and reading the investor information.

3

I did try reading through it but it only gave me so much before the jargon got a little heavy. Hence the ask from someone who may be more “into it” than I am.

4

As someone who’s looked moderately hard at these ETPs, I can tell you, with some authority, that I couldn’t find that information! Oh well if you don’t ask…

Even BH does dip, and you don’t want to be holding these products - any leveraged product - on a day when that happens.
If you are, therefore, holding them on a daily basis, CFDs have the advantage that there’s a trailing stop-loss available, the leverage is higher, and the spread is much lower. They both lose overnight.

5

i hear you but i wouldn’t knowingly dabble in CFDs. my risk appetite is not that high nor is my ability to commit time to them.

6

I meant it when I said “any leveraged product”! About the only benefit of these leveraged shares is, if they turn bad on you, you only lose all the value of the individual share, as opposed to the whole of your investment.
Remember (this is for a 3x) if the stock drops 20%, your value drops 60%. If the prime stock then rises 30% to be back to 104%,
your leveraged stock would be at 76% ( 100 - 60%, + 90%)

They’re only for when things are doin rosy.

The past year has been good. even so, BRKA has done 28%, but 2x has only done a little better at 35. If there had been more dips the 2x would have turned out worse than the prime stock, I expect

Even watching daily, if you sold after a bad day or two you could save suffering some of the drops, but timing the buy-back is imprecise. That CAN work with more volatile stock, but BH is too well behaved.

7

I’m not really looking at the 2x, 3x products tbh. just trying to understand how the 1x products are different in terms of the 2 criteria i’ve asked the questions about in the main post.

8

Leveraged shares can be issued in any currency and with any price. They are not shares in the original company but they track the price.

9

i know, my questions are a little more detailed than that

10

Hey, @H2T2 :wave:

Generally, it is best to forward such questions to Leverage Shares as their team has all the knowledge and details when it comes to the mentioned specifics. You can get in touch with them via this page, and I’m sure they’ll be more than happy to help :pray:

11

@H2T2, you can find additional information covering your questions in the following articles:

  1. How Do Leverage Shares ETPs Trade in Multiple Currencies - Leverage Shares
  2. How do Leverage Shares ETPs differ from other leveraged ETP issuers - Leverage Shares

A huge thanks to @Oktay for preparing them :fist_right: :fist_left:

2 Likes
12

thank you. while this does explain things to a good extent, it only raises more questions, albeit for @Oktay if he’d be willing to answer those.