Gate.ioブログGate.io Quick-fire Questions on Leveraged ETFs
Gate.io Quick-fire Questions on Leveraged ETFs
25 May 16:04
Q: What Is a Leveraged ETF? A: A leveraged ETF is one that tracks the rise and fall of the underlying asset. The growth or decline of an ETF is multiple times that of the underlying asset in the market (approximately 2.3 or 5 times at Gate.io). At Gate.io, each leveraged ETF product is backed by a contract position that is managed by the platform's fund manager, so you can easily build your own regular leverage portfolio without understanding the exact mechanics.
Q: What Are the "L" and "S" of Leveraged ETFs? A: "L" means long, e.g., ETH3L for ETH triple long token; "S" is short, e.g., ETH3S for ETH triple short token.
Q: What Are the Features of a Leveraged ETF? A: 1. No position explosion 2. No need to pay margin 3. Able to achieve automatic compound interest and automatic position reduction 4. Suitable for short-term unilateral market investment or risk hedging, not suitable for medium and long-term investment 5.Produces 0.3% daily management fee
Q: What Kind of Market Is Suitable for Leveraged ETF Trading? A: Unilateral market is more suitable for leveraged ETF trading. In the bilateral oscillating market, leveraged ETF will cause more unnecessary loss.
Q: Who Is Suitable for Leveraged ETF Trading? A: Investors who prefer high risk and have more investment experience, or users who prefer medium to short term investment can trade leveraged ETFs.
Q: What Is the Difference Between Leveraged ETFs and Leveraged Trading? A:
Q: What Is the Difference Between Leveraged ETFs and Perpetual Contracts? A:
Q: Why Won't Leveraged ETFs Blow up? A: The platform fund management will dynamically adjust the futures position (The contract position behind each product will be adjusted, but the number of your holdings will not change). In this way, the leveraged ETF can maintain a fixed leverage multiple for a certain period of time. After the adjustment of positions, the leveraged ETFs will automatically add positions when profit appears, and reduce positions when a loss occurs. In this way, the risk of being blown out will be avoided.
Q: What Is the Time for Position Adjustment? A: Gate.io adjusts position at 16:00 UTC every day.
Q: What is the Temporary Position Adjustment for Leveraged ETFs? A: When there is a big rise or fall in the market, the platform fund management will trigger the temporary position adjustment mechanism to prevent the contracts behind the leveraged ETFs from being hedged out. This mechanism only adjusts the position of the contract behind the leveraged ETF, and the quantity of your holdings will not change.
Q: Why Do Leveraged ETFs Need to Charge Management Fees? A: ETF products are subject to a daily management fee of 0.1% (0.2% for long ETFs) due to the need to hedge risk in the highly costly perpetual contracts. This management fee already includes costs such as contract market fees, funding rates, and losses caused by spreads in taking positions.
Gate.io will launch products such as portfolio ETFs and low-leverage inverse ETFs in the future. Costs can be greatly lowered to save more management fees through innovative technical optimization.
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