If you have suffered a leveraged ETF loss and you are not an extremely sophisticated investor, which is most retail investors, you may be entitled to a recovery. Advisors are investing individuals in investments like ProShares UltraPro QQQ (TQQQ), Defiance Daily Target 2X Long MSTR ETF (MSTX) and T-REX 2X Long MSTR Daily Target ETF (MSTU) without regard to the risk. Leveraged ETF investments are extremely high risk. The leveraged component makes the use of these investments suitable only an intra-day hedge for institutional accounts. These investments are generally not suitable for retail investors, or those holding the funds for more than a day, and those suffering losses should speak to an attorney.

2024 saw a rise in advisors recommending complex investments to retail investors. As stated in the Wall Street Journal, these investment are “too complex for their own good.” During 2024, ETF sales reached approximately $1 trillion. 30% of these funds in the US launched during this year focused on complex strategies. Leveraged ETFs “offering investors to shoot the lights out often wind up shooting [investors] in the foot.”

A leveraged ETF resets daily. This means that losses can compound exponentially in a very short time. Once the funds drop, the leveraged factor makes regaining the losses very difficult. These funds can go up or down extremely quickly.

One only needs to look to the history of leveraged ETFs to see the extreme risk. In 2018, VelocityShares Daily Inverse VIX Short-Term exchange-traded note, a leveraged fund, fell 85% in after-hours trading in one day. The fund’s multiplier was tied to the VIX. The same thing happened to the leveraged fund SVXY in 2018.

We represent investors and have been doing so for over 20 years. We have a long history of recovering losses for investors who are recommended in appropriate investments. Please contact us to see if we can help you concerning your leveraged ETF loss.