ETF and Leveraged ETF

ETF and Leveraged ETF

What is an ETF? 

An ETF (Exchange-Traded Fund) is a financial instrument that allows investors to indirectly invest in various assets such as cryptocurrencies, stocks, or other securities without the need to buy them directly. A simple way to think of an ETF is as a collection of assets packaged into one financial product that can be traded on an exchange, just like stocks.


Thus, an ETF is a simple and convenient way to invest in the market, whether it’s traditional currencies or cryptocurrencies.


On our platform, we offer ETFs such as ARKK (ARK Innovation ETF vs US Dollar), XOP (SPDR S&P Oil & Gas Explor & Prodtn ETF vs US Dollar), URA (Global X Uranium ETF vs US Dollar), and many others.


You can find the full list in the Margin Trading section. ETFs are available with leverage options of 1x, 2x, 3x, 5x, 10x, and 20x.




To add assets, go to the Market Overview, navigate to Settings, and select pairs from the list.




Leveraged ETFs


Leveraged ETFs are exchange-traded funds that use borrowed funds (leverage) to amplify returns on investments. On a cryptocurrency exchange, such funds allow you to earn more than regular ETFs, but the risks are also higher.

In simple terms, if a regular ETF tracks, for example, the price of a stock, then a leveraged ETF with 2x leverage will move twice as fast. For example:

- If the stock price increases by 1%, a 2x leveraged ETF will rise by approximately 2%.
- If the price decreases by 1%, the same ETF will fall by 2%.

On our platform, leveraged ETFs are available for trading with 1x leverage accounts and in Long Only mode. These ETFs track the movement of tokenized stocks or indices with a doubled or even tripled effect (details can be found in the specifications) for both Long and Short positions. Among the available options are ETFs for NDVA, TSLA, AAPL, and other well-known tokenized stocks and indices.

For example, the ETF NVDL is a long ETF that provides double the daily growth rate of the NVDA stock price, while NVD is a short ETF. Its price increases twice as much as the NVDA tokenized stock price decreases (see the table below). These ETFs are volatile and provide the opportunity for quicker earnings, but they also increase the risk of losses.



Detailed specifications for each instrument are available on the platform in the Margin Trading section.


How to distinguish leveraged ETFs from regular ETFs? 


To differentiate leveraged ETFs from regular ETFs, check their specifications. The specification indicates the fund's parameters, including the use of leverage.


In the specifications, the description of the instrument will include numbers indicating the leverage size, such as 2x or 3x. This means that leverage is being used, which increases profits or losses by 2 or 3 times. To open the specification, simply hover over the instrument.




Clients  are recommended to familiarize themselves with the description and specifications of new instruments before starting to trade.


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