has added the following ETFs: SERO3L, SERO3S and VET3L, VET3S. 3L
is a long position while 3S is a short position, which tracks the
price change range of the underlying asset and changes with amplified
With the updated re-balancing rules, the
leveraged ETF product now regularly re-balances to a target leverage
(2.3X) if a certain criterion is met at 0：00
UTC+8 on a daily basis; Besides the scheduled re-balancing, when the
real-time leverage of the product is larger than 3x, it will
re-balance as well.
Below are the new re-balancing
the real-time leverage is over 3 times, irregular re-balancing will
be triggered. The leverage will be adjusted to 2.3 times.
Regular re-balancing： Everyday
UTC+8, when the real-time leverage is less than 1.5 times or above 3
the underlying asset price changes drastically (e.g. up or down over
1 % on contract index price), regular re-balancing will be triggered
to adjust the leverage to 2.3 times.
3) After the upgrade, ETF’s
market volatility will decrease and frictions over a longer time will
be reduced; but it is far from completely avoiding the long-time
frictions. The ETF performs better in a one-sided market as it will
use profit to increase position and decrease position when there is a
loss, but it is not suitable for long term holding and performs bad
in a swinging market.
Trade SERO at https://www.gate.io/trade/SERO3L_USDT
Trade SERO at https://www.gate.io/trade/SERO3S_USDT
Trade VET at https://www.gate.io/trade/VET3L_USDT
Trade VET at https://www.gate.io/trade/VET3S_USDT
The leveraged ETF product re-balances to a target
leverage if a certain criterion is triggered. When it re-balances,
profit will be used to expand the position while the loss will lead
to decrease of the position. When trading with ETFs, you do not have
to pay a margin. You can simply buy and sell it to enjoy increased
exposure like you are trading with leverage. ETF products are managed
and hedged in the perpetual contract market. We charge a management
fee daily to compensate for the funding payment and trading fee which
is incurred at perpetual contract markets. No extra funding fee is
charged. By optimizing the fund management, the cost and risks for
you to get leveraged exposure are significantly reduced.
Digital currency prices are susceptible to high
volatility, which is even more tangible for the leveraged ETF
products. Therefore there is a risk to suffer amplified loss. Please
fully understand the product and risks involved before trading.
Furthermore, the change of an ETF product is not always about the
target times of the underlying asset over a certain time span as the
result of scheduled or irregular re-balancing. An ETF product is
hedged in a perpetual contract market, the profit will expand the
position and the loss will decrease the position, which will incur
greater friction in a swinging market. Due to the rebalancing
mechanism and the holding cost, the ETF is not suitable for long term
holding. It has greater fluctuation and higher risk. Please be
cautious. For more details, please read instructions about Leveraged
ETFs at our Help Center.
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December 30, 2020
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