My understanding on 1.7X $MSTR ETF $MSTX

Twelve_E
08-19

$Defiance Daily Target 1.75X Long MSTR ETF(MSTX)$ I just checked the Holdings on the site.

My understanding is that MSTX holds:

  • a. $6M worth of $MicroStrategy(MSTR)$ stock

  • b. Over 10x that amount in MSTR Swaps

  • c. With about 43% cash leverage (35M/81.5M)

To me that is *not* interesting because of the 10x in Swaps vs Stock ratio.

What would be interesting would be if a an ETF just only owned $MicroStrategy(MSTR)$ stock and then used 50% cash leverage to buy more $MSTR stock, with no swaps.

If a BlackRock or Fidelity type asset manager could borrow at 1% rates for this, and then sell that ETF for a 1.5% expense fee, then it's *very* interesting, IMO.

Because for the investor who wants to lever their $MicroStrategy(MSTR)$ position, it would be a question of a 1.5% fee on an ETF vs the 8% to 12% fee with using margin on a brokerage account.

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