{
    "type": "ETC",
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "replication_method": "synthetic",
    "ucits": false,
    "complex_factors": [
        "Leverage (3x daily)",
        "Synthetic replication via swaps",
        "Fully collateralised swap structure",
        "Counterparty risk exposure",
        "High volatility and compounding effects",
        "Commodity futures rolling costs",
        "High risk rating (7/7)"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Coffee 3x Daily Leveraged ETC is classified as complex due to multiple factors. It employs a 3x daily leverage, which significantly amplifies both gains and losses, making it unsuitable for investors without specialized knowledge. The product uses synthetic replication via fully collateralised swaps, introducing counterparty risk and complexity beyond standard physical replication methods. The high risk rating of 7/7, the compounding effects of daily leverage resets, and the exposure to commodity futures rolling costs further contribute to its complexity. Additionally, the product is not UCITS compliant, lacks capital protection, and is intended only for informed retail investors with specific knowledge of leveraged products. The extensive use of derivatives and the potential for significant tracking error due to daily rebalancing and volatility compounding effects make this a complex instrument under MiFID II regulations.",
    "confidence": 95,
    "counter_argument": "Some might argue that the product's full collateralisation mitigates complexity by reducing counterparty risk. However, the leverage, synthetic replication, and the inherent risks of commodity futures trading (including contango/backwardation effects) outweigh this. The daily reset of leverage and the compounding effects require sophisticated understanding, reinforcing the complex classification.",
    "risk_level": 7
}