Double or triple ETFs can be very volatile investments, so an investor should be aware of the risks involved.
By using future contracts to gain maximum leverage, ETFs known as Double or Triple ETFs offer magnified exposure to specific indices. Double and triple ETFs provide double or triple returns, but also incur double or triple losses.
For this reason, double and triple ETFs are an extremely risky investment, Day traders and institutional investors make use of these products as short-term hedging strategies or speculative bets.
People generally do not hold these positions for more than two days or so at a time; they compound daily and the position can quickly become untenable. If you intend to invest in these products, make sure you have a game plan.
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