Defiance ETFs Proposes Leveraged Funds with Hourly Resets

Defiance ETFs has filed a proposal with the U.S. Securities and Exchange Commission to launch a new series of leveraged funds that would reset on an hourly basis. The 16 proposed funds aim to offer 2x the hourly return of some of the most actively traded individual stocks and ETFs, representing a new frontier in tactical trading products.

How They Work

The proposed funds would operate similarly to existing daily leveraged single-stock ETFs but would reset at the end of each hour of the U.S. trading day, which runs from 9:30 a.m. to 4 p.m. ET. According to Sylvia Jablonski, CEO and CIO at Defiance, the products "treat the trading day as a single hour instead of a full day," allowing investors to make high-conviction bets on intraday price movements.

Underlying assets for the proposed funds include widely held names such as:

• Nvidia (NVDA)
• Microsoft (MSFT)
• The Roundhill Memory ETF (MEM)

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Jablonski noted that if an investor rolls gains into successive hours and the market trend continues, the effect of compounding could lead to larger single-day gains than those from a traditional daily-reset leveraged ETF. However, she also warned that if the underlying asset's price is volatile or reverses course, an investor holding these hourly products could end up with a loss even if the asset finishes the day with a gain.

Regulatory and Market Context

This filing comes as U.S. regulators continue to review the category of complex leveraged investment vehicles. The SEC has previously blocked proposals for products offering 3x or 5x daily leverage on single stocks. Defiance's filing specifies that the proposed hourly ETFs are suitable only for knowledgeable investors who understand the associated risks and can actively monitor their portfolios throughout the trading day.

If the SEC does not object, the new products could begin trading as early as November. The SEC did not immediately respond to a request for comment on the filing. The move by Defiance highlights the ongoing race among ETF providers to create more granular and amplified trading tools for sophisticated investors focused on short-term market fluctuations.