T-Rex Group has filed for exchange-traded funds (ETFs) that aim to leverage the daily performance of Microstrategy Incorporated (MSTR). The proposed ETFs will take 2x long and 2x inverse positions in MSTR, magnifying its daily stock performance by 200%.
T-Rex Group Files for Microstrategy ETFs, Dubbed the ‘Ghost Pepper of ETF Hot Sauce’
T-Rex Group, an issuer of exchange-traded funds (ETFs), has
filed
with the U.S. Securities and Exchange Commission (SEC) to launch two ETFs focused on Microstrategy (Nasdaq:
MSTR
), a company known for its substantial bitcoin (
BTC
) holdings. The T-Rex 2X Long MSTR Daily Target ETF aims to achieve 200% of Microstrategy’s daily performance, while the T-Rex 2X Inverse MSTR Daily Target ETF will target a 2x inverse performance of MSTR.
These ETFs are designed to magnify the daily movements of MSTR, which is heavily influenced by bitcoin’s price fluctuations. Microstrategy, led by CEO Michael Saylor, has made headlines for its aggressive accumulation of bitcoin,
holding 226,331 BTC
on its balance sheet. According to the proposal, the implied volatility of MSTR stock presents both high-risk and high-reward opportunities for investors.
“T-Rex just filed for the first-ever 2x Microstrategy MSTR ETFs.. these are a near-lock to be most volatile ETFs ever seen in the U.S., will likely be in the neighborhood of 20x the volatility of SPX,” Bloomberg analyst Eric Balchunas
stated
on X. “The ghost pepper of ETF hot sauce,” the ETF analyst added.
The filing’s risk section acknowledges that the T-Rex 2X Long MSTR Daily Target ETF and its inverse counterpart are not suitable for all investors. These types of funds require active portfolio management and a sophisticated understanding of leveraged strategies.
These ETFs are intended for short-term trading and are expected to experience high portfolio turnover due to daily rebalancing. The SEC filing meticulously highlights the significant risks involved, including potential losses if MSTR’s performance remains flat or experiences significant volatility.
What do you think about the two Microstrategy ETF proposals? Share your thoughts and opinions about this subject in the comments section below.
