Boost debuts 3x leveraged long and short ETPs on Borsa Italiana

Oct 31st, 2013 | By | Category: Alternatives / Multi-Asset

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Boost, a European provider of short and leveraged exchange-traded products, has entered the Italian market with the launch of eight ETPs on the Borsa Italiana, Italy’s main stock exchange.

Boost debuts 3x leveraged long and short ETPs on Borsa Italiana

London-based Boost has debuted eight 3x leveraged long and short ETPs on Milan’s Borsa Italiana exchange. (© Luca Volpi)

The London-based firm, which is headed up by former senior executives of ETF Securities, becomes the first issuer of 3x short and 3x leveraged ETPs on the Borsa Italiana ETFplus market.

The Italian listings mark Boost’s first foray outside of the UK, where it launched in December 2012.

The eight new products offer 3x leveraged long and short exposure to the FTSE MIB, the DAX, the Euro Stoxx 50 and the Nasdaq Commodity Natural Gas Index.

The two ETPs tracking the FTSE MIB, Italy’s principal stock market barometer, are the world’s first to offer triple leveraged long and short exposure to this index.

Each of the ETPs is designed to return 3x the daily movement, either long or short, of their underlying benchmark index. For example, if the FTSE MIB were to rise by 1% on a particular day, then the 3x long product would rise by 3% while the 3x short product would fall by 3%. Conversely, if the FTSE MIB were to fall by 1% then the long product would fall by 3% while the short product would rise by 3%.

Short and leveraged ETPs are not new in Italy. Indeed, the market for these kinds of products is among the most sophisticated in Europe. According to Boost, the two most popular equity ETFs traded on the Borsa Italiana in September 2013 were short and leveraged ETFs. Similarly, in August, the two most popularly traded commodity ETCs on the exchange were short and leveraged products.

Globally, demand for these products has increased over the past few years with assets rising to around $52 billion today. Demand has been driven, in part, by their relative simplicity, efficiency and multi-functionality. Among their most common uses are for strategies such as: leveraging the daily returns of an investment for the same capital as a non-leveraged trade; hedging existing positions; short-term tactical directional trading; pair trading; and shorting without the need for complex stock borrowing positions.

Commenting on the launch, Nik Bienkowski, Co-CEO of Boost, said: “Boost is very proud to be listing Italy’s first 3x Short and 3x Leverage ETPs on the Borsa Italiana. Short and leverage products can be useful tools, allowing investors to hedge portfolios or take short-terms views on the world’s major commodity and equity indices. Having already assisted with the launch of short and leverage ETCs in Italy before, Boost’s founders look forward to continuing their relationship with the Italian market.”

KCG (formerly known as Knight Capital) will act as official market maker and specialist for the ETPs.

Aidan Hsu, Head of European ETFs at KCG, commented: “KCG is very pleased to continue as Boost ETP’s market marker of choice as it extends its offering into Italy. ETPs, particularly leveraged products, have been popular with investors and traders in this market, seeking transparent and quality investments. We look forward to continuing our collaboration with Boost ETP as we combine our advanced technology with exceptional client service to provide efficient and liquid markets for the Borsa Italiana listed ETPs.”

The eight products are as follows:

Boost FTSE MIB 3x Short Daily ETP (3ITS)
Boost FTSE MIB 3x Leverage Daily ETP (3ITL)
Boost ShortDAX 3x Daily ETP (3DES)
Boost LevDAX 3x Daily ETP (3DEL)
Boost EURO STOXX 50 3x Short Daily ETP (3EUS)
Boost EURO STOXX 50 3x Leverage Daily ETP (3EUL)
Boost Natural Gas 3x Short Daily ETP (3NGS)
Boost Natural Gas 3x Leverage Daily ETP (3NGL)

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