Defiance Seeks SEC Approval for Hourly Reset Leveraged ETFs
Defiance ETFs has filed to launch 16 new leveraged ETFs, each tracking a single stock with 2x exposure reset hourly. The funds aim to double the performance of stocks like NVDA and TSLA every hour within six trading windows per day. These resets do not carry over losses or gains from previous periods, increasing compounding risk for investors. The filing highlights significant potential downside risks due to volatility: at 100% annualized stock price fluctuation with no net change in value, the funds could lose up to 63.2%. The SEC has previously rejected proposals for higher-leverage ETFs and is currently reviewing whether such products should be considered gambling-like. Defiance's proposal includes a toll of six basis points per day from trading fees, which accumulate over time. While the firm uses swaps and options for exposure, collateral requirements mean 40-60% of fund assets remain inactive.
Tickers: $AMD $GOOG $NVDA $PLTR $TSLA
Topics: Defiance ETFs ETF leverage SEC filing