Wall St's Risk Arms Race Amps Up With 5-X Leveraged ETF

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00:00Isabel, we're just saying how in contrast to Europe, the U.S. doesn't even have three times

00:03leveraged single stock ETFs, much less five times. Has that changed? Have the rules changed on us?

00:09So no one knows. Katie and I are in the same IB chat. And when this came in, we were all shocked.

00:13We thought it was a typo because when this three times actually made waves, you were like,

00:18this is insane, kind of crazy. And then you see this five times. So we were like, what happened

00:22to four times? So you just jumped to the five times. But then in Europe, these are already

00:26available, but none of them track single stocks. They just track indexes like the S&P, the Nasdaq,

00:31and even the Magnificent Seven. But if you think about it, if a stock or an underlying moves

00:3520%, if it's five times, what will happen? And this tracks Bitcoin, Ether, at least the proposed

00:41filings and all the volatile stocks you can think of from AMD, strategy. So it's very exciting to be

00:47in the ETF space right now. Well, talk to us about how the government shutdown sort of factors into

00:52this conversation and whether or not anyone is around to say no, say yes. What does this possibly

00:59look like? We're in day 20 of the shutdown. And that's what some people are saying. I mean,

01:02these aren't proven, but some speculators are saying maybe that's why they're trying to slip it in.

01:07Because some are also saying that once they submit, if everything is going well, within 75 days,

01:12this will launch unless something is gravely wrong. But it seems like they know what they're doing.

01:16So that's also one thing. But we've seen the SEC with PRIV, even if the stock becomes,

01:20even if the ETF becomes effective, they can still have the power to say, no, we don't want it and

01:25write a cease and desist letter or anything like that. One thing that you mentioned in your story,

01:29which I think is important context, is that leveraged funds have actually been posting

01:32outflows over the past three months. So it feels like there's maybe we've reached saturation or

01:37there's fatigue with these products? There could be, because when you look at the retail investors,

01:42people look at them as a monolith. But there are layers. And for a while, they were piling into

01:46crypto. They were piling into options. And then for a while, they were piling into leveraged ETFs. And maybe

01:50now they're getting tired of it. I mean, now they're auto callable ETFs. I mean, those are just

01:55filed. But it's just one high octane product after the other. Maybe it's just a blip those three

02:00months. But then it was interesting to see red, because usually we just see green on the screen

02:04when we run BI ETF or ETF Go. Especially when you've got the market so near record highs. It's definitely

02:09notable. Optimism is just everywhere. But we'll see.

02:12So, let's see.