Triple Your Gains … or Losses
Direxion this week, launched eight ETFs (4 long and 4 short) that are an extension of the previously existing double leveraged Ultra ETF’s from ProShares. So while EEV, SSO, SDS, QID, QLD and DUG provide a way for investors to make or lose 200% of the daily performance they track, these new ETF’s from Direxion allow investors to make or lose 300% of the daily performance.
These new ETF’s include:
- BGU – Large Cap Bull 3X Shares
- TNA – Small Cap Bull 3x Shares
- ERX – Energy Bull 3x Shares
- FAS – Financial Bull 3x Shares
- BGZ – Large Cap Bear 3x Shares
- TZA – Small Cap Bear 3x Shares
- ERY – Energy Bear 3x Shares
- FAZ – Financial Bear 3x Shares
So while the market (Russell 2k) was down 2.2% today, BGU was down 6.6% and BGZ was up 6.2%. Needless to say, these ETF’s are not for the faint-hearted. They magnify the markets daily performance by 3X, thereby making everyday a rollercoaster ride, in addition to the pre-existing volatility of the current market.
Today, while the Russell 2k ranged from 480.82 – 497.43 (-2.5% to +0.9%), BGU had a range of 39.50 – 44.25 (-0.4% to -11.2%).
Use these leveraged ETF’s with some caution. I tend to supplement my long positions with some of the leveraged ETF’s, specifically EEV and SSO.
– Faisal Laljee
Full Disclosure: I own EEV but my position can change anytime without notice.
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