Trading leveraged Exchange-Traded products is hazardous to your wealth

•The typical retail user of leveraged Exchange Traded Products (ETPs) looks like an overconfident gambler.•The retail investors who use leveraged ETPs get a lower performance than the users of vanilla ETPs.•The retail investors who use leveraged ETPs trade too much.•Holding leveraged ETPs penalizes individual portfolio returns.•Some highly loss averse investors use inverse leveraged ETPs to hedge their portfolios. Using a large set of both trading and survey data, we sketch the profile of the typical retail investor who trades Leveraged Exchange-Traded Products (LETPs). Our findings show that the typical user of LETPs looks like an overconfident gambler willing to take a high risk, though some highly loss averse investors use inverse leveraged Exchange-Traded Products (ILETPs) for hedging purposes. Aggregating holdings in both stocks and Exchange-Traded Products (ETPs), users of LETPs get a lower performance than retail investors who invest in vanilla ETPs (VETPs). The reason is twofold: they trade too much and hurt their returns when investing in LETPs. Though trading LETPs could be interpreted as rational gambling, the skewness of the monthly portfolio returns of LETP users does not offset the risk-return sacrifice in the mean-variance space.