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5x Leverage Is Too Much Says The SEC
Wall Street’s financial engineers thought they had found yet another way to turn financial markets into casinos. The gimmick this time is with 3x, 4x, and even 5x leveraged ETFs tied to individual stocks and cryptocurrencies. The SEC just ruled against these new proposals, apparently drawing the line at 2x leverage as the rules state. Nine issuers filed with the SEC for 3x, 4x, and 5x ETFs, betting that the new leadership at the SEC would be more open to speculation and be willing to ignore the significant risk entailed in these securities. Their strategy hinged on gaming the SEC’s derivatives rule—Rule ... (full story)