Tradr ETFs is doubling down, literally, on the quantum theme. On Tuesday, the company rolled out two new daily single-stock leveraged ETFs: the Tradr 2X Long QUBT Daily ETF (BATS:QUBX) and the Tradr 2X Long RGTI Daily ETF (BATS:RGTU).
These products are designed to provide 200% of the daily performance of Quantum Computing Inc. (NASDAQ:QUBT) and Rigetti Computing Inc. (NASDAQ:RGTI), respectively.
The launches bring Tradr’s leveraged ETF portfolio to 14 funds and cements its status as a first-mover in quantum-themed ETFs.
Speaking to Benzinga in an interview, Matt Markiewicz, head of Product and Capital Markets at Tradr, stated: “There are only several pure-play publicly traded quantum stocks out there, so investor attention is very focused on a handful of narratives right now.”
These new ETFs follow the success of the company’s leveraged D-Wave Quantum ETF, the Tradr 2X Long QBTS Daily ETF (BATS:QBTX), launched on April 25, which now boasts an average daily turnover of $32.5 million as of June 17.
Since late April, Tradr ETFs has rolled out five 2X long leveraged ETFs on other compelling single stocks, including Tempus AI (NASDAQ:TEM), AppLovin Corp (NASDAQ:APP), D-Wave Quantum Inc (NYSE:QBTS), Archer Aviation Inc (NYSE:ACHR) and Upstart Holdings Inc (NASDAQ:UPST).
As of June 17, the collective assets under management of those five ETFs, namely Tradr 2X Long QBTS Daily ETF (BATS:TEMT) , Tradr 2X Long APP Daily ETF (NASDAQ:APPX), Tradr 2X Long QBTS Daily ETF (BATS:QBTX), Tradr 2X Long QBTS Daily ETF (BATS:ARCX) and Tradr 2X Long QBTS Daily ETF (BATS:UPSX), stands at $110 million.
Also Read: BlackRock Debuts iShares TEXN ETF For Retail Investors Eyeing Texas-Based Stocks
Trading The Future, Not The Fundamentals
After the April launch of QBTX, Tradr is riding the wave of speculative interest in quantum stocks.
“In general, we are not making a fundamental call on any one stock when we launch these ETFs.” says Markiewicz. “We are looking at trading volumes, options volumes, volatility and what we call the ‘social zeitgeist' when we determine what could be a good candidate for a single-stock ETF.”
The appeal is obvious: speculative tales, jaw-dropping volatility and liquid underlying shares.
“It's the volatility of QUBT that attracts traders. Also, like all quantum computing stocks, there is an element of speculation that draws traders to each and every story. Kind of like a gold company looking for its next big deposit, a biotech announcing a successful trial on a Phase III drug or an oil exploration company on the verge of finding a massive reserve,” Markiewicz noted.
Not Just Hype, But High Risk, High Reward
For investors, the allure is leverage without the sophistication of options or the inconvenience of margin. QUBX and RGTU are both actively managed and constructed with total return swaps on the underlying securities.
“Well, both ETFs are actively managed so there is no ‘tracking error' per se as that term is generally applied to index funds,” Markiewicz said. “However, both RGTI and QUBT are extremely liquid underlying stocks. On many days, they show up on ‘most active U.S. stock’ lists. It's that liquidity that serves as the underpinning for the ‘total return swaps’ that enables the fund to aim for the 200% daily exposure.”
Nevertheless, he warned that such ETFs are short-term trading instruments, rather than long-term investments.
“As with any leveraged ETF, the volatility of the reference asset will play an important role in determining the final return of your trade. Even though you may have gotten the direction of the underlying trade right, your ETF trade return could deviate from that of what the stock has done.”
Also Read: New Defiance ETFs Offer 2X Bull And Bear Exposure To IonQ, Oklo And SoundHound AI
Quantum: AI’s Riskier Cousin?
While quantum computing remains in its infancy from a commercial perspective, institutional giants’ interest is serving to legitimize the space.
“If you take a look at the investment being thrown at quantum from companies like Amazon, Microsoft, IBM and Google, it's clear that there is something here,” Markiewicz observed, “Of course you'd never buy any of those stocks solely for their involvement in quantum but their R&D spend helps to validate the technology to an extent.”
The question now is whether speculative interest will persist as long as commercialization lags behind.
"It's kind of what AI was like three years ago when everyone started paying attention," Markiewicz said. "I'm not saying that quantum is three years out from being meaningful,l but just that it takes a while for the technology to start being of real value for corporations."
What's Next?
With leveraged ETFs on compelling stocks already in the book, Tradr’s thematic playbook is becoming increasingly evident: head towards where the volatility and the traders are.
And what about other quantum players such as IonQ or ColdQuanta?
“IonQ is up there in terms of being a lead horse in this exciting quantum race,” Markiewicz remarked, not suggesting Tradr’s quantum roster might have some entangled particles left to discover.
Read Next:
Photo: A9 STUDIO via Shutterstock
