00:02You're not meant to hold this over the duration.
00:05Talk us through how this performed in the days after April 2nd.
00:09Well, we just launched it actually just over two weeks ago.
00:12How would it have performed if the back test went back to April 2nd?
00:15I couldn't even imagine how it is.
00:17It's definitely more than a habanero for sure, right, Eric?
00:21But yeah, all the quantum computing games were pretty volatile back then too
00:26as people started selling risk in the wake of Liberation Day.
00:31So I was looking at this and it was a good experiment
00:33because like when MicroStrategy 2x came out, it was a huge hit.
00:37I mean huge.
00:38And I was like, well, maybe because it's just Bitcoin related or is it the volatility?
00:42You've tested this for me.
00:43It was half the volatility because your ETF comes out.
00:47Nobody knows who D-Wave Computing is unless you analyze that industry.
00:50And the volume on your ETFs is pretty high.
00:53Like we're talking $10, $20 million for a new ETF.
00:56That's incredible.
00:58The returns, it returned 100% in one day, which I think is a record.
01:02But what's the risk?
01:04Let's say this stock goes down or they find out something consequential about the stock.
01:09Is there a potential for it to like terminate like XIV?
01:12What's that?
01:13Could that look like?
01:14Well, as Scarlett alluded to, it is a daily reset leveraged ETF.
01:19So it gives you two times the performance of D-Wave Quantum stock.
01:25So, I mean, there is a risk, Eric, if it was to go down over 50%, you know, within the close down 50% that we would have to liquidate the ETF.
01:36Okay.
01:36So something to keep in mind there.
01:37Now, of course, it's not just D-Wave Quantum.
01:39You also have leveraged funds, one-day resets on AppLovin and Tempest AI.
01:44Can you talk us through how you decide which individual stocks to launch these ecosystems of leveraged single-stock ETFs around?
01:51What does that process look like?
01:52Yeah, well, first of all, we do a screen for volatility because that's, if you look at the past successful single-stock ETFs, I mean, it's the most volatile names are the ones that are, you know, more heavily traded and have more of the assets.
02:06And also, we sort of look at, is there a zeitgeist around some of these names?
02:10AppLovin is probably a name that not many people know about, you know, the underlying stock, even though it's a $70 billion company, rumored to be potentially one of the bidders for TikTok, of course.
02:19So that might make it more into the mainstream.
02:21But, you know, you can look at the volumes that the stocks are trading every day, look at the social media velocity, and you can maybe get a sense of, hey, this could make for a good single-stock ETF.
02:32Now, a lot of people say, what's the point of these?
02:34Can't you just use margin?
02:35And I'm like, well, a retail investor who wants to trade, this is just the convenience.
02:41You click a button and you've got the leverage on, right?
02:43And that's really what this is for.
02:45It's just bringing convenience to something you could have otherwise done on your own, right?
02:49Is that generally what is the value out here?
02:53Absolutely.
02:53And also, you know, aside from the margin requirements that you have to kind of be looking at, the options market, right?
02:59Because options are a way to get leverage.
03:02For a lot of investors, especially more self-directed on the retail side, very difficult to kind of constantly be managing your options portfolio.
03:10So it sort of solves two problems, Eric, with kind of one solution.
03:15You mentioned Apple Oven and TikTok as the potential driver for that stock.
03:20Let me ask a dumb question.
03:21What is the fundamental story here behind D-Wave Quantum?
03:24Well, it is, from what we've seen anyway, the only quantum computing company that actually has commercial products in the market, which is why the stock went up over 50% when they reported earnings on May 8th.
03:37And so a good time for us to kind of launch this product, you know, in front of earnings.
03:41But they're seen as one of the more, I guess, commercial quantum names.
03:46As far as I see, there are only four pure play quantum names out there.
03:50So there's another bit of a, there's a little buzz, right, around those.
03:54But D-Wave, again, seems to be the more commercial of the four quantum names at this point.
03:59As you've made clear, plenty of momentum behind the name as well.
Be the first to comment