The T-Rex 2X Long MSTR Daily Target ETF and the Defiance Daily Target 2X Long MSTR ETF have combined assets of about $4 billion, according to Bloomberg. Prime brokers have limited swap exposure to these ETFs due to the high volatility of MicroStrategy's stock.
Tuttle said the high leverage and volatility of ETFs led to higher margin requirements from swap counterparties. Cantor Fitzgerald, Marex and Clear Street are prime brokers for these ETFs.
MicroStrategy shares have nearly quadrupled since mid-August, far outperforming cryptocurrencies. ETF issuers use options to add complexity and need to track changes in derivative prices.
