ETFs & Mutual Funds
Booming MicroStrategy ETFs Are Straining Limits at Prime Brokers
- Prime brokers limit swap deals with ETFs tied to the hot stock
- ‘MicroStrategy is a different beast,’ says manager of MSTU ETF
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Amid a red-hot run in the shares of MicroStrategy Inc. last month, Matt Tuttle got some bad news from the prime brokers for his booming leveraged ETF linked to the shares of the crypto-centric company.
The prime brokers — units within banks that work with their clients on activities like securities lending — had reached their limits on how much swap exposure they were willing to offer for his roughly month-old fund, the T-Rex 2X Long MSTR Daily Target ETF (ticker MSTU), which by some measures was the most volatile exchange-traded fund to ever hit Wall Street at the time of its launch.