Subject: File No. S7-16-15
From: Kelly Allan
Affiliation: Individual Investor

December 29, 2015

I am an individual investor. Not wealthy, but increasing my wealth via 3x ETFs. My main investment vehicles are the 3x ETFs for Dow, SP, Gold, etc. I am concerned that the 3x funds will be dissolved because of the pending SEC rules. I understand the concern of the SEC in regard to liquidity and investor knowledge or lack thereof related to the short term nature and risks of the 3x ETFs. Nevertheless, EVERY search i've done for--and virtually every article I've read in the past 3 years about--2x and 3x ETFs make it VERY CLEAR that these 3x ETFs carry various risks. No one with even half a brain can be unaware of the warnings. And, yes, i'm sure some investors have "learned the hard way" about the risks because they ignored the warnings. But that is true of EVERY investment. Stocks, are after all, risk assets. I also find the 3x ETFs a great way to LIMIT my exposure to the unpredictable changes in the market. I suppose that sounds odd to say that they LIMIT my exposure when they are 3x leverage. Consider it this way: I pay attention to trading trends each day, and place orders to either capture that trend such as the Dow going up or down, OR i place orders that anticipate a break in a trend such as the down reversing direction. If my prediction is correct, i profit handsomely from the trade that day --or the next. i don't care if the 3x is exactly 3x. In my experience over the past 3 years, I've only twice seen really bad "out of balance" 3x leverage. Not bad considering the ability to get such good leverage. To continue with my scenario: If my prediction is wrong about the trend, i can either sell the 3x ETF quickly and/or take the inverse position to bring my loss to --or near-- neutral. So basically, i can balance the 3x UP against the 3x Down again, the Dow for example. I can decide to close out my position at the end of the day --or carry it for another day, which is usually the limit of my investment time frame for the 3x ETFs. A solution? Perhaps anyone who wants to invest in 3x ETFs needs to take a "quiz" about them before being allowed to trade. That way, folks could discover whether the 3x ETFs are for them or not--and those of us who adore the 3x ETFs can continue to trade them. I know you have to balance the risks to the public, etc. And, i thank you for all you do. But rules that would cripple the 3x ETFs are not a win/win solution. Thank you for reading.