---
title: The Costs of Synthetic Leverage in Single-Stock Leveraged ETFs: Theory and Evidence
url: https://www.ml-quant.com/papers/ssrn/7603998/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-10-16
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: SSRN 7603998
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7603998
featured: 2026-10-16
citations: unknown
topic: Derivatives & Volatility
---


# The Costs of Synthetic Leverage in Single-Stock Leveraged ETFs: Theory and Evidence

Single-stock leveraged ETFs incur excess financing costs averaging 6.2% annually through total-return swaps, fully passed to investors and substantially larger than disclosed expense ratios.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7603998
- Identifier: SSRN 7603998
- Released: 2026-10-13
- First featured: Quant Letter No. 135 (2026-10-16): https://www.ml-quant.com/issues/2026-10-16/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Derivatives & Volatility
- Authors: Jinming Xue, Hendrik (Hank) Bessembinder, Xiao Zhang

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