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Posted by
Two Blokes Apr 18 -
Filed in
Stock
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A new ETF is being proposed that plans to short both a 2x leveraged long ETF and a 2x leveraged short ETF on MicroStrategy stock The ETF prospectus claims it. The ETF prospectus claims it will profit from "volatility drag" affecting both leveraged ETFs, but our analysis shows this strategy actually has zero expected return from drag. We explain why the ETF's daily rebalancing approach cancels out the volatility drag it's attempting to capture, contradicting the fund's own marketing materials.
