Leveraged and inverse products
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 aim to deliver a daily return equivalent to a multiple of the underlying index return e.g. two times of what the underlying index does. Inverse products aim to deliver the opposite of the daily return of the underlying index. The inverse product goes down when the underlying index moves upwards, and the inverse product goes up when the underlying index moves downwards.
L&I Products are not intended for holding longer than one day as their return over a longer period may deviate from and may be uncorrelated to the multiple (in the case of leveraged products) or the opposite (in the case of inverse products) of the return of the underlying index over the period.
Since L&I Products are new to Hong Kong, you should know how they work and the risks involved before making your investment decision. You can understand more about the basics of L&I Products at the sections below.
Learn more about L&I Products
You can refer to these advanced sections if you are interested to learn more in depth about L&I Products, such as "daily rebalancing" and long-term holding risk.
You should assess whether L&I Products are suitable for you in light of your investment objectives, the amount of investment required, investment horizon and your risk appetite. Should you have any questions about L&I Products, please consult your intermediaries before making any investment decision.