Stefano
Sat Aug 17 2024
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7 answers
1710
How do leveraged ETNs work?
Could you please explain to me in simple terms how Leveraged ETNs, or Exchange Traded Notes, operate? I'm curious to understand the mechanism behind how they amplify returns on an underlying index or asset, as well as the potential risks involved. Specifically, I'd like to know if they use leverage to multiply gains and losses, and if there are any unique characteristics that differentiate them from other financial instruments. Additionally, I'm interested in understanding how their daily resetting feature affects performance over time and if there are any limitations or drawbacks to consider before investing.
