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Boost ETP, a London-based provider of short and leveraged exchange-traded products (ETPs), received a significant boost late last month when a single investor traded $19 million of the London-listed Boost Euro Stoxx 50 3x Short Daily ETP (3EUS).
The $19 million trade is equivalent to a total notional exposure value of $57 million.
The magnitude of the trade, which may have been executed to hedge a large existing portfolio position or to profit from a potential pullback in eurozone equities, further reflects the growing acceptance of short and leveraged ETPs as a viable alternative to derivatives including options, futures and swaps.
Global short and leveraged ETP assets rose by $6.8 billion (15%) in the first six months of 2013 to $50.9 billion. On-exchange traded volumes for the products also increased, rising from $114 billion to $195 billion per month over the same period, a 71% increase.
Nik Bienkowski, Co-CEO of Boost, commented: “Boost ETP has launched a platform of 36 short and leveraged ETPs providing a range of leverage factors to the world’s leading equity and commodity indices. With Boost’s experience in the European ETP market, we work closely with our clients and service providers to deliver a world class, robust, transparent, independent, cost effective and liquid product. Last week’s $57 million notional trade to short European equities demonstrates this liquidity.”
He added: “Growth of the short and leveraged ETP market has outpaced the growth of the overall ETP market by 10 percentage points this year, having grown to $51 billion. As a result of growing demand for transparent products, as well as growing demand for short and leveraged ETPs, Boost ETP will continue to innovate and provide market leading solutions for investors. Boost believes that independent ETP providers will continue to increase market share, and Boost is poised to benefit from this growth.”