A First In Turkey From Borsa Ä°stanbul: Leveraged And Short Indices Will Be Calculated

Borsa Ä°stanbul will start to calculate Leveraged and Short Indices which cover investment strategies with the expectation of a bull market (Leveraged Indices) and a bear market (Short Indices), on April 1, 2016. Leveraged and Short Indices will provide the opportunity to get same or inverse index exposure in return for smaller cash position.

Borsa Ä°stanbul will start to calculate Leveraged and Short Indices which provide the opportunity to get same or inverse index exposure in return for smaller cash position, on April 1, 2016.

The objective of Leveraged Indices is to reflect the return of a reference index (underlying index) by a multiple of the leverage factor in the same direction. It is assumed that, leverage is obtained by borrowing money and investing more in the underlying index. The borrowing cost of the leverage is supposed to be daily repo interest rates. Thus, the index is calculated by deducting the borrowing cost (return on BIST-KYD Repo (Net) Index) from the return on the underlying index.

The objective of Short Indices is to reflect the return of a reference index (underlying index) by a multiple of the leverage factor in the opposite direction. It is assumed that, short position is obtained by borrowing equities in the underlying index, selling them short, and investing the fund generated, in repo. Thus, the index is equal to the sum of the return on lending (BIST-KYD Repo (Net) Index) and the return on underlying index.

Indices are calculated from the closing values of underlying index and repo index. Base date of the indices is April 1, 2016 and base values are 1000.