The Julia La Roche Show · Thursday, July 16, 2026
Ted Oakley explains that the increased use of leverage exchange-traded funds (ETFs) is a significant factor in the heightened market volatility observed recently. He points out the massive amount of money flowing into these products, driven by their recent success, but warns of a potentially severe downturn when the trend reverses.
“Well, you know, I wrote about it in the last quarter letter. It was called the gambler. And it was about, uh, how people are just, they're gambling on everything. Single day options and but one of the things I found today, I ran these numbers up on leverage leverage exchange traded funds and leverage single stock exchange traded funds and it's huge. The amount of money that's going into those billions this year.”
“And I think people are just, it's been working for them. So they just keep on doing it until it doesn't work. And usually when it doesn't work, it's really bad. It's really bad.”
“Well, you make a good point there. That's exactly what it does. It increases the volatility. You think about it. If you have buying into a leverage ETF or selling for that matter, and that's why you see these major moves like in the semiconductors.”