Breaking News
Get 40% Off 0
🔎 See NVDA's full ProTips for an instant risks or rewards Claim 40% OFF

GraniteShares plans to boost leverage levels on US single-stock ETFs

Published Nov 30, 2023 12:45PM ET Updated Nov 30, 2023 12:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. William Rhind, Founder and CEO of GraniteShares Gold Trust, rings the opening bell at the New York Stock Exchange (NYSE) in New York, U.S., March 4, 2019. REUTERS/Brendan McDermid/File Photo
 
NVDA
-2.85%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PFE
+0.29%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSLA
+0.52%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
META
-0.68%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AAL
+0.61%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
LCID
+0.54%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Suzanne McGee

(Reuters) - GraniteShares plans to increase the amount of leverage on most of its single-stock exchange-traded funds (ETFs) to 200%, allowing investors to make bigger bets on daily movements in a handful of widely traded stocks, a Thursday filing with the Securities and Exchange Commission showed.

In the filing, GraniteShares said the move, which will include leverage boosts of 0.25 to 0.50 percentage points on ETFs targeting particularly volatile stocks like Tesla (NASDAQ:TSLA) and Nvidia, will become effective January 22, 2024. The company declined further comment.

The ETFs currently feature leverage levels ranging from 1.25x to 1.75x, meaning that the issuer has structured the funds to deliver between 125% and 175% of the daily underlying share price move in stocks like Tesla, Meta (NASDAQ:META) and Coinbase (NASDAQ:COIN). In many cases, issuers of these single-stock ETFs make "pairs" available, allowing investors to bet either that the underlying stock will rise or fall over the course of the day.

Approved in July 2022, single-stock leveraged and inverse ETFs have become one way for speculators to bet on the most volatile stocks, especially around earnings reports and other news.

But not all large, actively traded stocks make for good single-stock ETFs, said Todd Sohn, ETF analyst at Strategas.

"When these were first approved, there was a whole swathe of products and announcements, and some of them were real head-scratchers; there just wasn't that much interest or activity," Sohn said.

For instance, AXS Investments launched 2x bull and bear ETFs on Pfizer (NYSE:PFE) in July 2022, only to close them about six months later. Other planned single-stock ETFs haven't even been launched.

In the latter category are some of GraniteShares single-stock ETFs tied to companies like American Airlines (NASDAQ:AAL) and Lucid Group Inc. (NASDAQ:LCID) on which the ETF provider now plans to boost leverage levels.

"More leverage could generate somewhat more interest" in trading single-stock ETFs that either have lackluster trading volumes or have yet to be launched due to anemic investor interest, Sohn said.

By far the largest of the existing single-stock GraniteShares ETFs is its 1.5x Long NVDA Daily ETF, which allows investors to bet on the moves of artificial intelligence chip leader Nvidia Corp (NASDAQ:NVDA) and has assets of about $253 million. In contrast, the 1.25x Short TSLA Daily ETF has $1.5 million in assets.

GraniteShares plans to boost leverage levels on US single-stock ETFs
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email