Some investors and traders just love extreme volatility. If a 2x leverage isn’t enough, there are 3x leverage ETFs that can really offer volatility. And if Volatility Shares gets its way, there are about to be more 3x volatility ETFs — or “better” yet, the advisory group has even filed for 5X leveraged ETFs.

Leveraged ETFs are supposed to offer extreme gains for traders, but extreme leverage ETFs magnify losses when the “bets” are wrong. Many investors end up holding these leveraged ETFs for longer than they are supposed to held. To prove the point, these massively leveraged ETFs are supposed to just be held during a single trading session.

Again, many investors end up holding these in portfolios for much longer than a single day. It actually isn’t the fault of ETF managers that investors do not look through SEC filings and prospectus information to find out what the real risks are. They rarely look at what “other” securities are being held. And those same investors rarely consider what “tracking error risk” and “portfolio turnover risk” really mean.

A series of Form 485APOS were filed by Volatility Shares shortly after 5:00PM on October 14, 2025 calling for new leveraged ETFs that are 3x and 5x the volatility. Below are the filings that were tracked in crypto and in stocks.

In crypto:

• 5x Bitcoin ETF
• 5x Ether ETF
• 5x Solana ETF
• 5x XRP ETF

And in stocks:

• 5x $AMD ETF
• 5x $AMZN ETF
• 5x $COIN ETF
• 5x $CRCL ETF
• 5x $GOOGL ETF
• 5x $MSTR ETF
• 5x $NVDA ETF
• 5x $PLTR ETF
• 5x $TSLA ETF

Also in filings… 3x volatility for the same shares above. While the filing for “XRP” says the funds have a “daily investment objective,” the filings also show additional risks for any investors who may hold these shares for any period other than a day:

• Your return may be higher or lower than that sought in the investment objective, and this difference may be significant.
• Factors that contribute to returns that are worse than the return sought in the investment objective include smaller Index gains or losses and higher Index volatility, as well as longer holding periods when these factors apply.
• Factors that contribute to returns that are better than the return sought in the investment objective include larger Index gains or losses and lower Index volatility, as well as longer holding periods when these factors apply.
• The more extreme these factors are, and the more they occur together, the more your return will tend to deviate from the return sought in the investment objective.

The filings also show what types of investments will be held, including:

• Equity Securities
• Derivative Instruments (listed as Swap Agreements, Futures Contracts, and Option Contracts)
• Collateral Investments (U.S. Government securities; investment companies; corporate debt securities)
• Other Investments (Reverse Repurchase Agreements)

And the “principal risks” section was in bold: Daily rebalancing and the compounding of each day’s return over time means that the return of the Fund for a period longer than a single day will be the result of each day’s returns compounded over the period. This will very likely differ in amount, and possibly even direction, from five times (5x) the return of XRP for the same period. The Fund will lose money if XRP’s performance is flat over time. The Fund can lose money regardless of the performance of XRP, as a result of daily rebalancing, XRP’s volatility, compounding of each day’s return and other factors.

The 5x TSLA ETF filing also stated: “The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day.” The same sorts of securities were listed in the Tesla filing as well. And in the principal investment strategies, the filing said “Under normal circumstances, the Fund will invest at least 80% of the value of its net assets (plus borrowings for investment purposes) in Financial Instruments that provide exposure to TSLA. For purposes of this policy, these instruments include equity securities, derivative instruments including swap agreements, futures contracts and option contracts, and cash, cash-like instruments or high-quality securities that serve as collateral to the Fund’s derivative instruments (“Collateral Investments”).”

Here is how “Tracking Error Risk is defined, verbatim from the SEC filing: Tracking error is the divergence of a fund’s performance from that of its index or sought-after investment outcomes. Tracking error may occur because of imperfect correlation between the Fund’s holdings and the return of TSLA, pricing differences, or the need to meet various regulatory requirements. This risk may be heightened during times of increased market volatility or other unusual market conditions. Tracking error may also result because the Fund incurs fees and expenses while TSLA does not.

And here is how “Portfolio Turnover Risk” is defined, also verbatim from the SEC filing: The Fund may incur high portfolio turnover to manage the Fund’s investment exposure. Additionally, active market trading of the Fund’s shares may cause more frequent creation or redemption activities that could, in certain circumstances, increase the number of portfolio transactions. High levels of portfolio transactions increase brokerage and other transaction costs and may result in increased taxable capital gains. Each of these factors could have a negative impact on the performance of the Fund.

There are plenty of other risks noted in the SEC filings as well. That’s ok though, because most traders and investors will not bother looking into what those risks really added up to. Most investors and traders usually don’t even bother to gloss over descriptions of management fees, brokerage commissions, and other expenses that all add up — which were not yet specified in the SEC filings.

There are phrases like “the tail wags the dog” or “giving someone enough rope to hang themselves” that also apply to investing and trading vernacular. Tactical Bulls would also remind investors (and traders) that they need to understand exactly what it is that they own. That’s even true for ETFs — particularly leveraged ETFs.