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 ?
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.
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:
The easiest way to compare is to look at the German-listing (GDR) of Nvidia - ticker: NVD. As you can see here, it’s currently up 0.91%.
On some days it might not seem that you’re getting 3x the exposure to the US stock, but this is because of different market times.
If the US Nvidia stock maintains it’s 3% performance throughout the day, you should see a nice gap up on your 3x Nvidia tomorrow. In which case it will ‘seem’ like the 3x ETP is outperforming the US stock when pre-market trading starts.
