If you are an Indian investor investing in U.S. stocks, you may come across a product that is quite different from what you normally see in India: Single Stock ETFs.
Imagine you are extremely bullish on Nvidia. Instead of simply buying Nvidia shares, you can buy an ETF that aims to deliver 2x Nvidia’s daily performance. Similarly, if you believe a stock is going to fall, there are ETFs designed to move in the opposite direction. This is one of the interesting features of the U.S. market which gives retail investors access to strategies that are generally not available in the same way when investing in Indian equities.
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Unfortunately this is probably against RBI FEMA.
I don’t think so, leveraged ETFs have been around for long and their guidelines were for derivatives.
Any products that require margin is disallowed. Courts have increasingly taken the view “substance over form” and “what cannot be done directly cannot be done indirectly” and leverage etfs are enabling you to do indirectly what you cannot do directly.
Leveraged ETF doesn’t require margin.
Yes I know, but they allow you to do something which requires margin. It’s the same as incorporating a shell company to do derivative trading with margin while you own the company without margin.
I dont think it’s illegal. It is allowed by Dhan.
Zerodha also offered currency trading. It was always illegal to do trading in currencies without underlying exposure. But since everyone was just doing it,rbi had to interfere and clarify. But all those people who traded in currency before the clarification were in violation of FEMA. RBI did not add a new requirement just enforcing the old one. Just because it is not enforced for every person does not mean it is legal.
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Why we are not having single stock etf and fractional share of a stock.we have many stocks with price more than 5000 . If any one wish to own any of these means he may have to purchase more than his position size per stock ( small investors).
Leverage etf also missing , personally I am not interested in leverage.
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The requirement of underlying exposure for rupee derivatives has always been the central bank’s policy “for the last so many years”, the central bank’s Governor Shaktikanta Das said at a post policy media conference.
Maybe its just a display page… I have asked the question on Dhan’s forum
@Zerodha-Staff any clarification?
whitelisting/blacklisting etfs is next to impossible, especially in the global context
Guess leveraged ETF can be allowed, it is like a grey area and depends upon interpretation, one thing which is clearly not allowed is anything related to crypto.
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Ibkr does it though.
Under which section? Crypto is never mentioned in FEMA. It is also a “grey area” in my opinion.
you have to bring all the rules here 
and then, otherwise it will be guess work
Leveraged and Inverse ETs both are allowed by Most International Brokers
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Schwab offers full margin trading:
What you “can” do and what is “legal” to do are two different things.
Having said that , there is specifically no exact legal precedent against leveraged etf so far. And since it is under the radar, you probably might not get into trouble. Probably.
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Knowing Zerodha how much they have waited for clarifications regarding these probably stuff at other matters…
Well it would be wiser to not hope for …
Weren’t they going to do beta last Friday? Said it was a holiday now we’re a week later
…
My bad to commit the date, we want to and assumed we could do beta on that day but while internal beta we got couple of new cases which needed to be addressed before releasing to beta to public as this is totally new thing and many third parties are involved it is taking time. I believe we are closer to do beta for public now, not committing on any particular date though.
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