When the flow reversesMarkets spent years obsessing over option dealers and meme traders. Meanwhile, levered ETFs quietly grew into a $300+ billion ecosystem controlling more than $750 billion of equity exposure. The result: a growing pool of automatic buying on the way up—and automatic selling on the way down.Everyone loves levered ETFs when markets grind higher. The next selloff could encounter a much larger mechanical seller than investors realize.
The Rally's Biggest Buyer Could Become The Next Crash's Biggest Seller
More than $225 billion of levered ETF demand has hit global equities this year alone. Morgan Stanley estimates that every 1% decline now triggers $18 billion of automatic selling—and the effect grows as markets fall.
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