FINRA Reverses Course on Leveraged ETFs
July 27, 2009
After earlier warning that it was concerned about investors holding leveraged exchange-traded funds for 10 days or longer, FINRA, in its latest podcast, appears to be backpedaling.
“Leveraged and inverse ETFs can be appropriate if recommended as part of a sophisticated trading strategy that will be closely monitored by a financial professional,” FINRA said. “At times, this trading strategy might require a leveraged or inverse ETF to be held longer than one day.”
This is a compete about-face from what FINRA said in June: “While the customer-specific suitability analysis depends on the investor’s particular circumstances, inverse and leveraged ETFs typically are not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”
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