1Wk·

Question about the Nasdaq 100 2x leveraged ETF

I "unfortunately" bought this a few weeks ago and am now busy buying more. My question now is what the situation is with liquidation because of the 2x leverage. Can I be liquidated at all? Is there a possibility of a total loss? Because I don't really care how far the ETF falls and I am also aware that I will make double the loss in the event of a fall, but the question is whether I can lose everything from a certain point? I am currently down a whopping 27%. What happens at 100%? Do I still have the shares or does the ETF disappear from my portfolio? $LQQ (+0.8%)

13 Comments

Tino@parlania

1Wk

No way, the nasdaq would have to fall 50% in one day. Trading will be suspended before then

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Twizzi@Twizzi

1Wk

Am also about 28% in the minus Buy the simply all the time after

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Sandy the Squirrel@Esperanza

1Wk

Am with x3 NASDAQ -19.37% despite after buy. I have always set limit buy, but with NASDAQ x3 in steps of 5. Hit limit buy 5 times today and bought 6 of them today alone and am now invested with 1370 euros or so😂 already -250 euros loss. Yes, I also have to see what I do next

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WallStreetWhiz@WallStreetWhiz

1Wk

Why not just use the normal NASDAQ without the headache? I currently have about 100 K in it, and would sleep really badly with such a leveraged thing

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thewolfofgetquin@thewolfofgetquin

1Wk

because then I have more capital to put into my FTSE All World, no one has ever died from a leverage of 2

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WallStreetWhiz@WallStreetWhiz

1Wk

@thewolfofgetquin Such leveraged ETFs are very risky in the long term, especially in volatile or falling markets.
They reflect twice the daily movement, not twice the long-term performance. In other words: path dependency. In the event of strong fluctuations, the ETF can lose massively - even if the Nasdaq later rises again to or above its all-time high.

Example:
If the Nasdaq first falls sharply (e.g. -30%), then fluctuates for longer, and later rises +10% above its all-time high, the 2x ETF can still be significantly in the red - even -20% or more, depending on the path.

I.e. only suitable for very short-term trades. Dangerous in the long term, especially in a bear market. But everyone does what they think is right.

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Joris@Joris

1Wk

@WallStreetWhiz aaah now I understand the path dependency. Thank you.
If you take a normal KO ScheinLong, the leverage increases as the price falls and so it can (unless of course it doesn't go long) make up for the losses.
But this etf is a factor certificate where the leverage always remains the same and your scenario occurs.
It has clicked 😅 Thank you

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Kate💎 🙌.@Iwanowitsch

1Wk

I really wouldn't recommend holding leveraged ETFs in the long direction at the moment and certainly not buying them. If you are really only down 27%, I would realize that. Leveraged ETFs are not suitable as a long-term investment, they are more for experienced traders. Due to the daily leverage effect, they multiply the daily price movements, not the long-term development. Over weeks or months, this can lead to completely different results than expected. In fluctuating markets, leveraged ETFs often lose value even when the underlying asset moves sideways or recovers, due to daily rebalancing. If the market falls, your leveraged ETF loses twice as much but then needs enormous price gains (> than x2) to recover. Search term: path dependency

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thewolfofgetquin@thewolfofgetquin

1Wk

@Epi would you share this opinion with realizing the loss and getting out of the 2x nasdaq ETF. i am invested with 4k euro and have losses of 1k😪

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Epi@Epi

1Wk

@thewolfofgetquin Difficult. The neg momentum is strong at the moment, it can simply continue to go down. But strong rebounds are also possible at any time with the torn gaps. If you haven't sold yet, you can actually wait for such a rebound and then realize losses. Something is possible up to 18500. But I don't know exactly either. 🤷

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thewolfofgetquin@thewolfofgetquin

1Wk

@Epi yes had the same thing in mind thank you 🙏

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tommycashless@tommycash

1Wk

First inform, then buy for the next time 🫡😁. @Epi they called you!

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Epi@Epi

1Wk

@tommycash Who? What?
I don't think they'll be able to cope without me. 😁

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