Defiance ETFs is attempting to further compress the reset cycle of leverage ETF from daily to hourly. According to the documents submitted to the U.S. Securities and Exchange Commission (SEC), these proposed products will cover popular tech stocks such as Meta, Microsoft, NVIDIA, Palantir Technologies, and Tesla, with the goal of providing approximately twice the individual stock exposure in a shorter time frame.

Rebalancing is planned to be performed six more times per trading day.

Different from the current majority of daily leverage resets ETF, these products will no longer be reset uniformly only after the close of trading; instead, position adjustments are planned to be made multiple times during the trading day. The document indicates that the fund will mainly maintain approximately twice the exposure through swap contracts or options, and rebalancing will be conducted six times within each trading day.

This means that what is now tracked for products is no longer the "daily double increase or decrease" in price, but rather the target return within a shorter time frame. If a particular stock experiences significant fluctuations during a certain period due to financial reports, product releases, or sudden news, traders can conduct more targeted trades around that time frame.

• The covered targets include Meta, Microsoft, NVIDIA, and other tech stocks.
• The target exposure is approximately twice that of the underlying stock.
• 6 rebalances are planned for each trading day.

The compound interest effect is more evident during the trading session.

Leverage has always been regarded as a trading-oriented tool, rather than a typical long-term holding product. After resetting hourly, this characteristic is further amplified. The profits and losses of each time period become the basis for recalculating leverage in the next period, so the compound interest effect occurs more frequently within the same trading day.

If the target stock price continues to move in one direction, this design may amplify profits; however, if the market fluctuates repeatedly, losses can also accumulate more quickly. ETF analysts from Bloomberg Industry Research, led by James Seyffart, are cautious about this. They believe that, except for a few hourly trading windows centered around financial reports or announcements, such products may not provide a significantly different risk exposure compared to those with daily resets.

Regulatory scrutiny continues to tighten.

At the time of this application, regulatory authorities in the United States and overseas are tightening their scrutiny of high-leverage ETF. SEC has slowed down the approval process for funds with leverage of three times or more, and South Korean regulators have also raised the investment threshold this summer after retail investors participated heavily in related products and suffered significant losses.

In this context, although the new scheme of Defiance provides more detailed intraday trading tools for active traders, it will also face stricter regulatory assessments due to amplified volatility and faster risk accumulation. It is still uncertain whether the product will ultimately be approved.