Mar. 17, 2020
Comment on SEC Proposed Rule #S7-24-15: Limiting the tools available to investors leads to unintended consequences and could lead to riskier trading activities. Leveraged and inverse funds are valuable tools that can be used to hedge risk and provide investors the chance to invest with defined losses. With leveraged funds I can invest smaller sums of money in the market as both a means to hedge exposure and express a view without having to short a stock, invest in riskier assets or use margin. Inverse funds are also great tools for providing limited loss etfs for hedging market risk or trade a counter view that without these instruments I would be forced to either liquidate my portfolio, short stocks or use costly options to achieve a less effective result. These leveraged and inverse etfs are effective and valuable investing tools. Limiting their access could lead riskier behavior by investors such as stock shorting and margin trading. Like any investment the risk of these instruments needs to be managed appropriately. Investors that lose money in these etfs are likely to lose more money if forced into other ways to hedge and trade. The tools are effective, and yoU don’t throw the baby out with the bath water. Regards, Jerad Cassalia