## [# Bring On The 5x ETFs](/sections/features/bring-5x-etfs)
# Bring On The 5x ETFs
ETF issuers are testing the limits of leverage with new 5x filings.
[](/authors/sumit-roy)
[By Sumit Roy ](/authors/sumit-roy)
Oct 23, 2025
Edited by: ETF.com Staff
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Several ETF issuers stunned the market this month with filings for funds offering up to five times leverage, mostly tied to single stocks and cryptocurrencies.
We already have many 3x ETFs tied to indexes, like the [**ProShares UltraPro QQQ (TQQQ)**](/TQQQ). Years ago, there were plenty of 3x ETFs linked to commodities such as oil and natural gas too.
Today, as far as I’m aware, there’s just one 3x commodity-linked product in the U.S., the [**MicroSectors Gold 3X Leveraged ETN (SHNY)**](/SHNY). On the equity side, there’s even a 4x note, the [**MAX S&P 500 4X Leveraged ETN (SPYU)**](/SPYU).
ETNs are a different beast compared to ETFs. They are debt instruments issued by banks, not funds that hold assets, and they have largely fallen out of favor as banks look to limit balance sheet exposure and investors shy away from counterparty risk.
## Is 2x the Limit?
What we don’t have today are single-stock or crypto products offering more than 2x leverage. Leveraged single-stock and crypto funds launched in 2022 and 2023, respectively, after new U.S. regulations appeared to limit how much amplification they could provide.
ETF.com’s Dave Nadig recently [wrote](https://www.etf.com/sections/news/5-things-know-about-5x-etfs) a great explainer on the relevant rule and how it works. SEC Rule 18f-4 was widely interpreted to cap leverage in new products at 2x while grandfathering in older 3x funds like TQQQ. But Dave pointed out that, with some creative structuring, it might actually be possible to comply with the rule while offering higher leverage.
Whether the SEC agrees remains to be seen. We’re in a more permissive regulatory environment, but not *everything* goes. On the other hand, with the government shutdown still underway, some of these products could, in theory, go live automatically if the SEC doesn’t act in time.
As Dave put it, “If I was making odds here, I suspect that these will be nixed by the SEC staff as soon as they come back to work and clear off their desks. But that’s part of the strategy. Thanks to the ETF Rule (6c11) and recent generic listing standards, as crazy as these filings may seem, they are actually ‘normal,’ and thus, if the SEC doesn’t explicitly kibosh them, they go live in 75 days.”
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## I Don’t Mind
Ever since leveraged ETFs first hit the U.S. market nearly two decades ago, there’s been debate over whether they should exist at all.
One side argues that people should be free to do what they want with their money. The other side believes regulators need to protect investors from doing dumb things with it.
I lean toward the former, with the caveat that there are plenty of bad actors out there, which makes education and transparency crucial. As long as people understand what they’re getting into, they should be allowed to take stupid risks with their money.
And they already do.
Even the riskiest proposed leveraged ETFs are mild compared to what traders can already do right now in the options market. With short-term options, for instance, you can effectively get 100x or even 1000x leverage. The difference is that traders who use those kinds of options usually learn the risks pretty quickly.
## An Expensive Lesson
With leveraged ETFs, that understanding isn’t always there. Though they’ve been around for nearly two decades, plenty of people still don’t realize that “2x” in the name doesn’t mean double the return over time. Volatility decay and financing costs eat away at performance, so long-term results can diverge sharply from expectations.
A lot of investors find this out the hard way after losing more money than they should have. Add 3x or 5x leverage to single stocks, and that same lesson just gets more expensive.
Another issue is that many issuers aren’t clear enough about the risks. Sure, the disclosures are there in the fine print, but volatility decay and financing costs should be front and center on the website.
Then again, maybe higher leverage will make the point more obvious. A trader comparing a 5x fund to a 2x fund that’s doing better despite the same underlying stock might start asking the right questions.
Ultimately, I don’t know what the SEC will do. But as long as the products are transparent and perform as advertised, I have no problem with them trading.
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[ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy)
Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy)
Related Topics [Leveraged](http://www.etf.com/topics/leveraged)