On July 30, financial adviser L. Michael Ladd said he bought shares of the leveraged NUGT and kept buying on the dips in anticipation of higher prices after gold miners touched multi-year lows. Ladd, though, only allocated a small percentage of money to the position, about 3% to 6% of investible assets. [Oversold Gold Miner ETFs May Have Opportunity to Rebound]

As of June 30, hedge fund Tontine Associates LLC was the largest investor of UWTI, holding about 1.6 million shares, according to FactSet, and Trading firm Virtu Financial Inc also held one million shares of UWTI.

Potential investors should also understand how the products work, especially during longer periods. In times of increased volatility, leveraged ETF returns can fall behind their intended 2x or 3x strategies. The VelocityShares 3x Long Natural Gas ETN (NYSEArca: UGAZ), a popular way to track leveraged natural gas price movements, has declined 58% this year while the unleveraged United States Natural Gas Fund (NYSEArca: UNG) declined 14%. VelocityShares also states that the product is not not suitable for long-term investing. [Do You Know How Your Leveraged ETFs Work?]

“Our tactical trading products are designed for sophisticated investors,” Nick Cherney, head of exchange-traded products at VelocityShares, which is owned by Janus Capital Group Inc, told the WSJ. “We market them to institutional traders who are often trading multiple times a day and are using the products as part of more systematic strategies.”

For more information on leveraged fund products, visit our leveraged ETFs category.

Max Chen contributed to this article.