Some brokerage firms issue warning statements when a person attempts to a buy double X or triple X leveraged ETF.
The much higher volatility and decay in multiple over time with leveraged ETFs are real issues. However, beyond those two issues is the underlying risk reward proposition in these types of derivatives any greater than the systemic risk with an unleveraged index ETF? Even with the very high expenses ratios on a 3x leveraged ETF that decays to 2.5x in 9 months, how is an investor being unfairly compensated from a reward over risk perspective?
I used leveraged ETFs for over a decade with success, but beyond the two obvious issues, I'm interested in knowing other issues that may not be so obvious.