I had always reckoned that IVs on Leveraged ETFs (LETF) are "increased by the same amount as the leverage i.e. if it is 2x then IV will be 2x. This will essentially double your cost (in my example), while likely paying more bid/offer.". But like others, I have noticed the opposite.
We shall compare LETFs with ETFs with the SAME expiration and underlying index. I know that the strike prices of LETFs will differ from the ETFs'.
1. So how can we fairly and reasonably compare their different strike prices?
2. Are options on Leveraged ETFs cheaper?
3. If true, why? Simply because options on LETF are less liquid? Because options on LETF are demanded less?