Wednesday, August 15, 2012

Volume in Leveraged ETFs is Evaporating

It's well known that market volume has been light and falling over the last few years, but one market segment that is seeing a greater volume decline than others is leveraged ETFs.  Trading volume in these 2x and 3x vehicles has evaporated compared to where it was in 2009.  My guess would be that investor interest in double and triple levered etfs has waned because 1) volatility has fallen and 2) investors have realized that these are terrible long term investment vehicles.

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