DIY InvestorMagazine
/
March2014
30
7. USESANDTRADING STRATEGIES
SL ETPs can be used by a wide range of investors for
many different trading strategies:
•
Treble daily returns, positive or negative
(excluding fees and adjustments).
•
Hedge existing positions in one simple trade
•
Use in a long-short strategy using both a leverage
ETP and a short ETP
•
Use in a pair trade to take advantage of
undervalued assets
•
Short themarket/asset class quickly, efficiently
and cost-effectively
•
Short ETPs allows the investor to profit in a falling
market
•
Use tactically within a broad portfoliowhere an
investor holds strong short term convictions
BOOST ETP
STRUCTURED
PRODUCTS
ETFS
CFDS/ SPREADBET FUTURES/OPTIONS
Underlying / asset
classes
Equities,
Commodities
Many
Single commodities
not possible
Many
Many
Leverage
Yes
Yes
Yes (onlyup to2x)
Yes
Yes
Losemore thanyour
invested capital
No
No
No
Yes
Yes
ExchangeTraded
Yes
No
Yes
No
Yes
MultipleMarket
Makers
Yes
No
Yes
No
Yes
Arbitrageable
Yes
No
Yes
No
Yes
Unsecured credit
risk
No
Yes
No
Yes (MFGlobal &
World Spreads)
No
OverCollateralised Yes
No
Usually
No
No
High fees
No
Yes
No
Yes
No
BOOST ETP
STRUCTURED
PRODUCTS
ETFS
CFDS/ SPREADBET FUTURES/OPTIONS
Transparent
Yes
No
Mostly
No
Yes
Highly liquid and
trade in large size
Yes
No
Yes
No
Yes
Margin calls& close
out
No
Yes
No
Yes
Yes
Short termdated No
Yes
No
Yes
Yes
(rolls& exercise dates)
N.B The information contained in this article is not intended to represent all the risks associatedwith Leverage and Short ETPs, nor does it list
all the important factors one should consider when reviewing whether a Boost ETP is appropriate. Investors should review and understand the
Prospectus including the ‘Risk Factors’ section before any investment into Boost ETPs.
This communication has been provided by Boost ETP LLP which is an appointed representative of Mirabella Financial Services LLP which is
authorised and regulated by the Financial Conduct Authority. Please read our full disclaimer at
before
considering an investment in Boost ETPs.
8. LEVERAGEETPSAND POSSIBLERISKS
Leverage ETPs have been fiercely debated in investor circles
as towhether they are risky and/or complex investments.
Leverage has been around for many centuries and a
multitude of financial products exist to enable investors
to gain leverage and/or short exposure. An investor should
understand the benefits and risks of each leverage product
and see which one suits their goals and circumstances for
the specific trade being considered. SL ETPs increase the
tools available to investors, and used in the right way, can
enhance returns.
Boost considers its products provide a robust, transparent,
exchange-traded, collateralised, secure and relatively cost
efficient tool for a wide range of investors to gain leverage
or short exposure, through their normal brokerage or
investing channels.
