Leveraged and Reverse ETF Analysis: Short-term Strategy or Long-term Investment? 🚀

How does a leveraged ETF work? Simply put, it amplifies the "daily" returns of the underlying index through financial derivatives. Reverse ETF? It provides the opposite daily return of the underlying index. They act like a magnifying glass for the market. 🔄

Leveraged ETF Operation Method 💡

They borrow money to buy more assets. That's it. Financial derivatives and borrowing multiply the effects of the underlying index. Look at those popular leveraged ETFs in 2025 - RIOX, ETHU. The performance is a bit amazing, to be honest. RIOX rose more than 32% in a single week! ETHU also exceeded 18%. These are not joking numbers. 🔥

Long-term holding? Don't be foolish ⏱️

Holding leveraged ETFs for the long term does not seem wise.

Why? The compounding effect can mess everything up. Daily rebalancing can lead to actual returns being very different from what you expected in the long run.

Market fluctuations are significant, and losses are even more severe. Look at October 2025, the market is in constant turmoil. The S&P 500 broke 6,400 points, reaching a new high. Risks are more apparent now. 🌊

Leveraged ETF vs Traditional ETF 🆚

High volatility. Returns can be high. Risks are also high.

KOLD type reverse leveraged ETFs have a weekly return of over 13%. FLYU, a 3x leveraged ETF, performs even more astonishingly in the short term. However, these are suitable for short-term trading strategies. Long-term investment? Not really suitable.

Want to buy Reverse ETF?🛒

Open a securities account. Choose a suitable Reverse ETF. Place an order to buy. It's that simple.

Remember, these are primarily short-term tools. They are not long-term investments. The popular Reverse ETFs for 2025 include AAPB and AAPX, which target specific stocks. There are also those targeting industries, such as JNUG. 🌕

Leveraged ETFs allow you to "bet big with a small amount." But be careful when using them. Choose leveraged ETFs with high trading volumes, as they are easier to buy and sell, with slightly lower liquidity risks. They may seem attractive, but the risks are equally significant. 🚀