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Since these would help me manage risk in my personal financial portfolio, why are there no exchange traded options on 3x leveraged ETNs?

Is there a prohibition that the SEC is perpetuating? Is there an agreement amongst exchanges not to trade them? If the SEC is approving/disapproving these particular products, what authority is that based on?

I've anecdotally heard "too much leverage" before, but there are ways to get more leverage than options would provide and it also isn't law (although the SEC has historically unparalled discretion over how ETFs and ETNs operate), so any insight into this would be great

  • Many leveraged ETFs do. Such as SPXL. 3X S&P, with listed options. I'm still studying what can be gained from the strange decay issues these 3X exhibit over time, the daily leverage that can't exist for a year due to volatility. – JoeTaxpayer Feb 19 '15 at 16:43
  • @JoeTaxpayer yes, but as you noted, I am curious about the ETNs – CQM Feb 19 '15 at 19:25
  • Understood, but you tagged and referenced ETFs as well. Is your question why is it available on leveraged ETFs but not ETNs? – JoeTaxpayer Feb 19 '15 at 19:28
  • @JoeTaxpayer I actually created the leveraged-etn and sec tag for this question. the ETF tags were the only ones available. There are a lot of products that attempt to offer 3x exposure which are only available as ETNs with no options. – CQM Feb 19 '15 at 19:40
  • Ok. Do I have it right now? In general, 3X ETFs have options, 3X ETNs do not? – JoeTaxpayer Feb 19 '15 at 19:57
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Are you referring to a specific type of ETN? Because leveraged ETNs do exist: http://etf.about.com/od/etfbasics/a/List-Of-Etns.htm

Some examples of 3x leveraged ETNs:
UUPT (POWERSHARES DB 3X LONG US DOLLAR INDEX FUTURES)
BUNT (POWERSHARES DB 3X GERMAN BUND FUTURES)
DGLD (VS 3X INVERSE GOLD LINKED TO S&P GSCI GOLD)

See above list for more examples.

  • Right. But there are options on these ETNs. ETFs such as SPY have listed options, but not the ETNs you listed or the OP is asking about. – JoeTaxpayer Feb 19 '15 at 16:40

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