How leveraged ETFs are able to track the DAILY price movement?

Discussion in 'ETFs' started by crgarcia, Dec 10, 2008.

  1. Have heard they use swaps in addition to futures.

    How they do it, exactly?
  2. richrf


    Googled and found this on

    How do these things really work?

    Leveraged ETFs resemble regular index ETFs in that they're geared to track the returns of a given market index. To generate ramped-up returns, however, most leveraged ETFs invest in a combination of stocks and derivatives, including options, futures, and swaps. For instance, the ProShares Ultra QQQ ETF, which tracks the Nasdaq 100 index, holds a combination of swaps and futures contracts in addition to shares of Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT), and Qualcomm (Nasdaq: QCOM).