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What are Double and Triple ETFs?

Double and triple ETFs are also known as leveraged ETFs, and their goal is to magnify the performance of the index they follow.

Using futures contracts and other derivative instruments, 2x or 3x ETFs attempt to magnify the performance of an index, with the goal of achieving the result daily. Because they also compound daily, they are not usually held for more than a few days.

These are also called leveraged ETFs because they use margin, futures contracts, and other derivative instruments to give an investor this magnified exposure. They give you two or three times (respectively) the profits but also two or three times the losses, so one must be very cautious when dealing with them.

Inverse ETFs, whose performance is opposite that of the index, are also available with double and triple exposure.

Should I Use Double or Triple ETFs?
What is a Limited Liability Company (LLC)?
How Do I Measure My Risk Tolerance?

Keywords: investments, Exchange Traded Funds (ETFs), derivatives, margin, Futures, leveraged ETFs, inverse correlation, 2x ETFs, 3x ETFs,
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