inthemoney

Leveraged ETFs: Making Volatility More Volatile?

> Leveraged ETFs came out in late '06 and really got going in '07 and '08. Can't we think of other things that might have caused increased market volatility, such as issues surrounding an epoch credit crisis and challenge to the viability of our financial system, not to mention the recession that went along with it.
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We see 2% moves almost on daily basis in the last 30 min of trading. I think it is a high time somebody looked into this. If it was the economic situation that made the market super-volatile, it would've been distributed throught the day (and there is some of that) but the 90% is in the last 30 min.
For anyone watching markets daily it is very very obvious. A lot of people can actually predict the moves, and front running them, thus making the move even bigger. The last 30 min move is usually the opposite of the move on that day, but in the direction of the previous day (if that was opposite). If the previous day was in the same direction, then the last 30 min is in the direction of the day.
Now, if I can figure it out, what the Wall Street wizards with power tools are doing with this information, what do you think?