Wall Street’s Risky ‘Razor Blade’ Trade Is Making a Comeback

Her parents are scared of her because they don't like the stock market. If they knew everything she was buying, they would be even more scared.

A boom in exchange-traded funds and notes, investment vehicles that use financial derivatives to pump up returns, is being powered by an army of retail investors. These investments can be traded just like stocks, and can be tracked by an index. The twist is that they are designed to deliver two or three times the index's daily gain or loss, or even to pay the opposite return, allowing buyers to bet against the market. Regulators worry that many investors don't understand their risks because they're notorious for getting caught up in past market meltdowns. Few on Wall Street seem to have noticed the resurgence of meme-stock madness.