How the highly anticipated SpaceX IPO is poised to change the ETF industry

Summary

Todd Sohn, chief ETF strategist at Strategas Securities, discusses how the highly anticipated SpaceX IPO will immediately create a slate of levered ETFs. He emphasizes that these products are meant only for day trading, not buy-and-hold investing, due to daily resets, high costs, and expected extreme volatility.

• SpaceX IPO expected to be the largest in history.
• Multiple levered ETFs (2x daily return) on SpaceX are set to launch on day one of the IPO.
• Issuers such as ProShares and Defiance have already filed for these products months ago.
• The levered ETF industry recently surpassed $200 billion in assets and continues to grow.
• Todd Sohn warns traders to understand fees, swap costs, and the daily reset mechanism.
• He advises that these levered products are for day trading only, not for long-term investing.
• Extreme volatility is expected in SpaceX shares and the levered ETFs right from the start.