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Published On: Mon, Feb 25th, 2013

Ultra ETF

An Ultra ETF is a type of Exchange Traded Fund that has within its balance sheet the use of leverage.  This leverage is often times used to buy double even triple the amount of the NAV of the underlying securities held on the balance sheet of the ETF.

The Ultra ETF will have nearly the same as 200% or 300% upward or downward movement as a similarly invested non-leveraged ETF.  Popular Ultra ETFs are often called names such as Gold 2x Ultra or Gold 3x Ultra, meaning the Ultra ETF will move up and down at nearly 2x or 3x the amount of a standard similar Gold ETF such as SPDR Gold Trust ETF (GLD – NYSE.)  Ultra ETFs offer the trader the benefits of leverage without the need for a margin account.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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