Gate.io, a leading cryptocurrency exchange, has introduced two new leveraged ETF tokens: PROMPT3L and  PROMPT3S. These tokens offer traders 3x leveraged exposure to the price movements of their underlying assets, enabling the potential for amplified returns.

Leveraged ETF tokens are designed to magnify the daily returns of their underlying assets by a specified factor—in this case, three times. For example, if the underlying asset's price increases by 1% in a day, a 3x leveraged long token (like PROMPT3L) would aim to increase by approximately 3%, while a 3x leveraged short token (like PROMPT3S) would aim to decrease by about 3%. This amplification effect can lead to significant gains in trending markets but also poses the risk of substantial losses, especially in volatile or sideways markets. 

 Gate.io's leveraged ETFs adjust their positions daily to maintain the target leverage ratio. This process involves increasing positions during profitable periods and reducing them during losses, aiming to keep the leverage consistent. 

Trading these leveraged tokens does not require margin accounts or borrowing assets. Traders can gain leveraged exposure by simply buying or selling the tokens directly. 

To cover costs associated with position management and market fluctuations, Gate.io charges a daily management fee. For instance, the management fee rate for certain ETFs has been adjusted from 0.3% to 0.1%, reflecting the platform's commitment to optimizing user costs. 

While leveraged ETFs can enhance potential returns, they are primarily suited for short-term trading strategies due to their daily rebalancing mechanism. In volatile or sideways markets, the effects of rebalancing can lead to increased friction and potentially diminish returns. It's crucial for traders to fully understand the mechanics and risks associated with leveraged ETFs before engaging in trading activities. 

The addition of PROMPT3L and PROMPT3S to Gate.io's suite of leveraged ETF products provides traders with new tools to speculate on the price movements of their underlying assets with amplified exposure. As with all leveraged products, these tokens carry inherent risks and are best suited for informed traders who actively manage their positions. Gate.io's platform offers comprehensive resources and support to assist users in navigating these advanced trading instruments responsibly. 
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