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The Index which the short/ leveraged ETC is tracking has moved by x per cent, yet my short/leveraged ETC has moved y per cent. Why doesn the ETC track the exact movement of the Index?

April 26, 2017cent exact index leveraged Moved short track

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The Index which the short/ leveraged ETC is tracking has moved by x per cent, yet my short/leveraged ETC has moved y per cent. Why doesn the ETC track the exact movement of the Index?

1 Answer

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The short or leveraged ETC is designed to track for example, one or two times the daily percentage change of the index not the actual movement of the corresponding Index. For periods greater than one day, the return may not equal one or two times the change in the Index.