Direxion 3X ETF's rule

Discussion in 'ETFs' started by bat1, Jan 15, 2009.

  1. bat1


    After apparently determining that investors' appetite for leveraged ETFs (and huge volatility) has not been sated, fund management firm Direxion has launched 14 ETFs over the last few months that offer three times the upside (or downside) of the underlying indexes (and there are at least two more such ETFs on the way).

    Critics have raised concerns about individual investors exposing themselves to the levels of volatility (and potential losses) that come with these ETFs. Proponents of Direxion's ETFs, meanwhile, point out that they allow investors to hedge portfolios with far less capital. Regardless, the 3x ETFs have been very popular, and several of them trade well over a million shares everyday.

    A look at stock tracking trends on tickerspy.com gives a sense of which of the 14 3x ETFs investors are finding most useful. While the aggregate numbers aren't large (these ETFs are still quite new), it's clear that a handful of these ETFs have garnered a lot of interest with investors.

    The Financial Bear 3x (NYSE: FAZ - News), which seeks to achieve 300% of the inverse (or opposite) of the price performance of the Russell 1000 Financial Services Index, has the largest following among tickerspy.com members. Other popular 3x ETFs include the Small Cap Bull 3x (NYSE: TNA - News), the Large Cap Bull 3x (NYSE: BGU - News), the Large Cap Bear 3x (NYSE: BGZ - News), the Small Cap Bear 3x (NYSE: TZA - News), the Financial Bull 3x (NYSE: FAS - News), and the Energy Bull 3x (NYSE: ERX - News).

    better then stocks :)

  2. I love these.

    The options are getting more volume on these now too, made bank on a scalp of FAZ calls today, now in a swing trade on FAS Feb 15 calls.
  3. FYI - Mid Cap Bull & Bear launched last week... 16 funds out now.

    MWJ & MWN

    The lower volume sector ETFs as well as options will pick up with volume. Its a chicken/egg game trying to get spreads tight & volume up. In the beginning spreads are wide so volume is down... More volume = tighter spreads = more volume. As day traders get in there you will see these things improve.

    financials were crazy yesterday. LOTS of volume... just be careful!!! My idea of a "long term" play is carrying overnight risk - ONE NIGHT...

    Some links - also I'll be happy to answer any questions about these things... I know a thing or two about them :D


    Fund listing with Bloomberg tickers, etc.

    Nice Leveraged/Compounding piece:
  4. Shouldn't be too many years, when ETFs will become the new Futures contract - 5X, 7X, etc...