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3x Mag-7, anyone?

rforno
in Other Investing

Yikes. IMO this means we're officially in the 'irrational exuberance' phase of the latest tech craze, I think.....

Per SA:

ProShares has filed with the U.S. Securities and Exchange Commission to launch a new leveraged exchange traded fund aimed at investors seeking amplified exposure to the market’s most influential technology-driven stocks. The proposed ProShares UltraPro Magnificent 7 ETF is designed for bullish investors looking to capitalize on short-term moves in the Magnificent Seven group.

According to the filing, the fund seeks daily investment results, before fees and expenses, equal to three times the daily performance of the Magnificent 7 Index.

Comments

  • MarkMark
    Hard pass here cowboy. Can one bet on the min/hr/day outcomes on Draftkings or similar?
  • yogibearbullyogibearbull
    edited February 9
    Since 2025, SEC has restricted leveraged ETFs/ETPs to +/- 2x. However, existing +/- 3x ETFs were grandfathered, so they do exist.

    ETNs weren't restricted, so new +/- 3x ETNs can still be issued - but ETNs are really debt or IOUs.

    But that hasn't stopped industry filings of even +/- 5x ETFs/ETPs. or the ProShares filing mentioned in OP for +/- 3x ETFs. So far, these filings have been summarily rejected by SEC. I think the industry is counting on some slipup at SEC or a reversal of previous SEC rules.
  • larryB
    There is an old saying in the car business that goes something something like this: “ There is an ass for every seat!” Some putz will buy these shares.
  • DrVenture
    ProShares UltraPro Short QQQ (SQQQ)

    3x Nasdaq short.

    - 74% for 2023
    - 50% for 2024
    - 53% for 2025

    + 2% YTD "Things are really looking up for Old Gil!"
  • Observant1
    edited February 9
    The 2x and 3x ETFs are for traders, not investors.
    I avoid 'em.
  • yogibearbullyogibearbull
    @DrVenture, these things are offered in +/- pairs.

    So, for QQQ, there is +3x TQQQ and -3x SQQQ. ProShares makes money on ERs for both. These were grandfathered under the 2025 SEC rules limiting leveraged ETFs to +/- 2x - there were fears then that rules may apply to all, but industry lobbied for grandfathering.

    ProShares could have shutdown SQQQ, but it may be keeping it because it cannot offer new -3x.
    https://schrts.co/egUZmGdp
  • DrVenture
    edited February 9
    Observant1 said:

    The 2x and 3x ETFs are for traders, not investors.
    I avoid 'em.

    Yeah, kinda figured that. Still, the recent upturn reminded me of the Simpson's character. Seems like something he might've bought into.

    "This iconic, ironic line belongs to Gil Gunderson ("Ol' Gil") from The Simpsons, an incredibly unlucky, desperate salesman known for failing miserably despite trying his best. It highlights his delusional optimism amid constant ruin, serving as a running gag about his sad life."

    @yogibearbull Thanks, interesting.

  • Sven
    We have a group of very wise and savvy investors here. Well done!
  • JD_co
    Ol Gil would have purchased a huge slug of 3x Mag 7.......on margin.

    And then he'd be sleeping on your couch.
  • Sven
    Wonder if Cathy Woods would invest in such leveraged products?
  • DrVenture
    JD_co said:

    Ol Gil would have purchased a huge slug of 3x Mag 7.......on margin.

    And then he'd be sleeping on your couch.

    Ahahaha!

  • hank
    edited February 10
    Mark said:

    "Can one bet on the min/hr/day outcomes on Draftkings or similar?"

    Yes @Mark. I looked this up for @Derf this morning (re different thread) with a Google AI query. DraftKings now facilitates betting on investing in financial assets:

    "DraftKings has introduced 'DraftKings Predictions,' a specialized platform allowing users to trade contracts on financial, entertainment, and sports events in 38 states, as reported in late 2025. This app functions like a prediction market, enabling users to take positions on financial outcomes rather than traditional stock market investing. The app allows users to trade yes/no contracts on real-world financial and sports outcomes. These events contracts are regulated by the Commodity Futures Trading Commission (CFTC), not as traditional gambling, allowing for broader availability in states without legalized sports betting."

    I'm waiting to learn how I can transfer my IRAs to DraftKings. Hopefully in time for the next Super Bowl.:)
  • msf
    I'm waiting to learn how I can transfer my IRAs to DraftKings. Hopefully in time for the next Super Bowl.:)

    Self directed IRAs might get you there. I haven't thought this through, only observing how one might compound risk upon risk upon risk. Just in case one is left unsatisfied loading up with crypto in one's retirement funds.

    https://www.nerdwallet.com/retirement/learn/self-directed-ira
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