American Greed
2 / 14    

Top 10 Investor Traps

Leveraged exchange-traded funds (ETFs) are a relatively new financial product, which is why investors may not be aware of the risks they carry. The funds, which trade throughout the day like a stock, use exotic financial instruments like options and other derivatives to generate better returns than the as the value of the underlying assets rise or fall. Given their volatility, these funds typically are not suitable for most retail investors.

» more from American Greed

<strong>10. Leveraged Exchange-Traded Funds (ETFs) &nbsp;</strong>

Leveraged exchange-traded funds (ETFs) are a relatively new financial product, which is why investors may not be aware of the risks they carry. The funds, which trade throughout the day like a stock, use exotic financial instruments, including options, other derivatives and promise the potential to generate better returns than the market return. Given their volatility, these funds typically are not suitable for most retail investors.

Source: North American Securties Administrator Association (NASAA)Photo: Oliver Quillia for CNBC.com