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After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

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Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#21

Post by FabHK »

WorkerBee28474 wrote: post #11
brcmthrowaway wrote: post #4

Are other countries like the West where 'markets' (equities, derivatives, prediction) have a wide ranging pervasive effect on culture?

The Indian derivatives market is huge . Lots of people gambling there.

Indeed. It's so much bigger (in notional terms) than the underlying stock market that you can manipulate it by making large bets in the derivatives market, then move the underlying cash markets with much smaller bets, and collect profit.

That is what Jane Street (IIRC) was accused of. Some of its traders then went to another hedge fund and did the same trick there, reducing Jane Street's profit, and ended up being sued by Jane Street. (BTW, Jane Street claims it was not manipulation, but basis trade arbitrage.)

Of course, 9 out of 10 gambler end up in the red.

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#23

Post by FabHK »

[deleted] wrote: post #18
raziel2701 wrote: post #6

The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people. The turn towards financial nihilism will continue.

[deleted]

Seems to me that many people do not care about part 3 anymore.

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#24

Post by [deleted] »

raziel2701 wrote: post #6

The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people. The turn towards financial nihilism will continue.

[deleted]

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#25

Post by HWR_14 »

jiggawatts wrote: post #15
adventured wrote: post #8

Earlier quoted context omitted.

US household assets are fairly well distributed between real-estate and equity markets. China for example previously had ~70% of its household wealth tied up in real-estate, which has suffered enormous declines over the past four or five years. That said, there's no question that US households have grown fat on the massive expansion of the tech giants. A one trillion $ market cap was shocking not long ago, now you've…

Both NVIDIA and Apple derive much of their wealth from off-shored manufacturing to… drumroll … China! (PRC+ROC) If China decides to take over Taiwan and nationalises TMSC, redirecting their top tier silicon to 100% Chinese companies then what are the American firms worth?

If China takes over Taiwan, TMSC's assets are being reduced to rubble before Taiwan's first shot back.

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#26

Post by sitkack »

HWR_14 wrote: post #25
jiggawatts wrote: post #15

Earlier quoted context omitted.

Both NVIDIA and Apple derive much of their wealth from off-shored manufacturing to… drumroll … China! (PRC+ROC) If China decides to take over Taiwan and nationalises TMSC, redirecting their top tier silicon to 100% Chinese companies then what are the American firms worth?

If China takes over Taiwan, TMSC's assets are being reduced to rubble before Taiwan's first shot back.

Which is why Taiwan is safe until china can produce domestically because their power comes from exports.

China is not going to sabotage themselves like that.

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#27

Post by mkotlikov »

The problem isn't leveraged funds, it's margin on leveraged funds.

Leveraged funds are the safest way for the average investor to get access to leverage because unlike margin there is no risk of margin calls, and your money generally won't go to zero unlike options which are vastly more complicated and can expire.

The reality is that using leveraged funds (or any leverage) is a completely rational move because the average person will never retire wealthy unless they're already making a tech salary or similar.

Investing has always been gambling, even Warren Buffet made his biggest early wins on all-in bets.

Re: After Losses, Retail Investors Flock to 3x Leverage as 2x Product Are Restricted

#30

Post by Terr_ »

raziel2701 wrote: post #6

The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people. The turn towards financial nihilism will continue.

While "financial nihilism" is part of it, I think we should be putting even more attention towards the forces that are trying to deliberately encourage it for profit.

Kind of like pathological gambling: Sure, some people are susceptible, but there's also an entire industry around finding them and making them succumb.

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