What are they?
These are Exchange Traded Products (ETP) on the most popular US equities like Apple, Tesla, Amazon, Facebook, Microsoft and others.
How do they work?
For example, if the underlying stock increases by 2% on a given day, the:
- 2x ETP will aim to increase by 4%
- 3x ETP by 6% (and vice versa).
The -1x ETP seeks to provide short exposure. Hence, if the underlying drops by 2% on a given day, the:
- -1x ETP will aim to increase by 2%.
Should I consider using them?
- SIPP/ISA eligible
- Tradable in USD, EUR, and GBx
- More exposure using less capital
- Leveraged / short exposure in a simple trade
- Guaranteed liquidity up to $10mn - BNP Paribas is dedicated market maker
- No credit risk. The ETPs are physically backed: issuer purchases the underlying stocks directly
What are some possible trading strategies?
- Hedging existing exposures (using -1x ETPs)
- Capitalizing on volatility of stocks (using 2x or 3x ETPs)
- Capturing longer term momentum (using -1x, 2x or 3x ETPs)
- Reacting to earnings releases (using -1x, 2x or 3x ETPs)
- Many others