Hi Matt,
I would like to qualify the following reply to your post by first saying that there are others out there who probably have better answers than I.
First off, I do not have any confidence in the current administration. What ever they may do is anyones guess, but this is not a forum for politics.
Second, although somewhat sadly, these days you almost have to think of all securities (stocks, ETF's, and even futures, options, & other derivatives) as simply pieces of paper. The value of these pieces of paper go up and down, depending on how much the next person wants to pay for them.
Third, if leveraged ETF's were to be taken off the market (and that is a big if), I suspect the only penalty would be the loss of that equity to trade. After all, they are completely legal. And major firms, hedge funds, and other big money are using them more and more these days.
Fourth, I haven't seen any evidence that SKF has damaged allegedly legitimate financial companies. The movement of a stock is greatly influenced by the index and sector that it is in. For example, if the economy is slowing down, and if the NASDAQ is going down, and bio-tech is taking a beating (due to investor sentiment or any other reason), chances are that even a well managed and profitable bio-tech companies stock will also be pushed down. Simply put, that is the only reason the value of any "allegedly legitimate financial companies" stocks are down.
A couple of final thoughts . . . I love to trade the leveraged ETF's. And there has been a lot of potential profit to be made this past week. But for me, the volatility this past week was too great (meaning the potential to loose money was also very great), so I just sat on the side lines. When the market stabilizes some, I'll get back in.
