Question about 2x Leveraged ETFs or Stocks

Hey all,

Quick question regarding 2x leveraged ETFs or Stocks when traded on ISA Platform.

My understanding was that SWAPs get applied on leveraged product or they get recalibrated at the end of working days. Sometimes resulting in losing money everynight even though the price could be flat. I cannot see a SWAP fee on the ISA platform for these instruments.

Any clarification please on trading these?
For example, if im trading 2x Amazon and hold these overnight - is there anything I should be aware of ?

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I don’t think there is a overnight swap. Because as you say the fund resets it’s leverage at the end of every day. It would be at the start of the next day that the ETP/ETF enters into new futures agreements to get the 2x leverage. I could be wrong.

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Ok, i’ll have to dig into it a bit more as I have not touched them yet. Thanks Nick :+1:

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Looking at the KIID, seems to be just a flat 1.75% management fee:

https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx?type=packet_fund_unit_doc_priip_kid&docid=fa553108-f564-4b7c-a8d8-f2b4f08bbe48&user=RJWN5%2F1K4mxEPE5qM68H8JHm%2BhLrRLildqN59P4Wb6Q%3D

Edit: At the bottom, composition of costs.

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Hi @adm @nickspacemonkey,

For the Leverage Shares products being discussed, there are no swap fees.

Since the leverage comes from Leverage Shares (as a company) using a margin loan from a prime broker, the only fees included in the 1.75% mentioned are:

  • Management fee: 0.75%
  • Margin interest rate: Fed funds rate (currently 0%) + 1%

So the all in fee is 1.75% annually (or about 0.0048% per day).