The leveraged ETF market is seeing massive inflows. US-listed leveraged ETF market exposure is up to $420 billion, the highest since early July. Over the last 3 weeks, exposure has surged by more than +$100 billion. At the same time, assets under management (AUM) have risen +$40 billion, to $180 billion. The gap between AUM and exposure comes from leverage: a 2x ETF with $100 billion in assets creates $200 billion in market exposure, while a 3x ETF creates $300 billion. This means the true market impact of leveraged ETFs is nearly 2.5x their headline AUM. At this pace, both metrics will exceed their June all-time highs as early as next month. There has never been more leverage in the market.(The Kobeissi Letter)