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Leveraged and inverse products (L&I Products) are derivative products traded on the stock exchange. L&I Products are structured as funds, but unlike conventional funds, they are not intended for holding longer than one day and are designed for short term trading or hedging.
Leveraged products seek to deliver a daily return equivalent to a multiple of the underlying index return.
Inverse products seek to deliver the opposite of the daily return of the underlying index.
For example, assume an investor puts $10,000 into each product, with the underlying index starting at 10,000 points:
If the underlying index rises 3% in a day (from 10,000 to 10,300):
| Product | Daily Return Target | Investment Value |
| 2x Leveraged Product | +6% (2 × 3%) | $10,600 |
| -1x Inverse Product | -3% (opposite of 3%) | $9,700 |
If the underlying index falls 3% in a day (from 10,000 to 9,700):
| Product | Daily Return Target | Investment Value |
| 2x Leveraged Product | -6% (2 × -3%) | $9,400 |
| -1x Inverse Product | +3% (opposite of -3%) | $10,300 |
The above example is for illustrative purposes only. These products rebalance daily and are not intended to be held for more than one trading day. Returns over periods longer than one day may differ significantly from the targeted multiple or inverse of the underlying index.
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