The US bank has identified leveraged ETFs as a strong driver for aggressive market downturns.
The financial giant's analysis, which first gained significant traction following a sharp market correction in late 2024, points to The inherent structural mechanics of leveraged exchange traded funds (ETFs), particularly their daily rebalancing activities, as primary contributors in exacerbating market volatility. ‘The market move drove large selling flows from levered ETFs on Friday (10 October), likely caused option dealers to turn short gamma, and will likely trigger further systemat