Leveraged exchanged traded funds(ETFs) offering double or triple the daily return of an index have been a hot-bed of controversy and subject to numerous class-action suits in the United States.
And so, Kelly Capital's announcement last Friday of 100x leveraged ETFs created quite a stir as it made it way among investment blogs.
Kelly Capital talked of launching the world's first such offerings: Kelly Daily Nasdaq 100 Bull 100x Shares (symbol-SOAR) and Kelly Daily Nasdaq 100x Bear Shares (symbol-SINK).
"To my dismay, a deluge of e-mail poured in from investors, most of whom wanted to buy either SOAR or SINK," he wrote.
"With results like these, no wonder financial companies can foist off just about anything on investors."
The statement last Friday said: "The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days. However, those paying attention during the day will be able to maneuver in and out of the funds before they crash to zero."