|Day's Range||0.2500 - 0.4500|
Direxion is dramatically altering the time frame for shifting 10 of its geared exchange traded funds to double from triple leverage, saying that those changes will go into effect after the close of U.S. markets on March 31 after originally being slated to be implemented on May 19.Citing an unprecedented spike in market volatility at the hands of the COVID-19 pandemic, Direxion said last week it planned to reduce the daily leverage exposure on 10 well-known ETFs, including the Direxion Daily Gold Miners Index Bull 3X Shares (NYSE: NUGT) and the Direxion Daily Gold Miners Index Bear 3X Shares (NYSE: DUST), to 2x from 3x."Effective after market close on March 31, 2020 each Fund's investment objective and strategy will change to seek daily leveraged, or daily inverse leveraged, investment results, before fees and expenses, of 200% or -200%, as applicable," said the issuer in a statement released Friday after the market close. That timeline has now been moved up substantially after the firm received expedited approval from the SEC.Other Funds AffectedIn addition to the aforementioned NUGT and DUST, which are two of the most heavily traded leveraged ETFs in the U.S., the small-cap counterparts - Direxion Daily Junior Gold Miners Index Bull 3X Shares (NYSE: JNUG) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSE JDST) are also being reduced to double leverage.Today, JNUG traded with 260% leverage instead of the usual 300%.At a time of increased duress in the oil patch, Direxion will ratchet the Direxion Daily Energy Bull 3X Shares (NYSE: ERX) and the Direxion Daily Energy Bear 3X Shares (NYSE: ERY) down to 2x status. The same treatment is being applied to the ultra-volatile Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares (NYSE: GUSH) and the Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares (NYSE: DRIP).The Direxion Daily MSCI Brazil Bull 3X Shares (NYSE: BRZU) and the Direxion Daily Russia Bull 3X Shares (NYSE: RUSL) are the other affected funds. All 10 products will see "3X" dropped from their names with "2X" moving in.Wild MovesAt a times of elevated volatility, leveraged ETFs can deliver extreme moves in rapid fashion, testing uninitiated traders' appetite for risk. For example, both the bullish JNUG and bearish JDST are saddled with losses this month to the tune of an average drop of 85.5%.Geared ETFs use derivatives to obtain leverage, but that leverage isn't obtained on a dollar for dollar basis. Rather, if a geared fund has $100 million in assets, it must maintain 0 million worth of exposure to the index it tracks.In volatile markets, the need for daily rebalancing can hinder outcomes because a levered fund may increase exposure to an index in advance of a large decline and an inverse leveraged ETF can reduce exposure in advance of big rally.See more from Benzinga * Gold ETFs Betray Safe-Haven Reputation In March Market Meltdown * 4 Bearish ETFs Just Right For A Wild Market With Coronavirus Volatility * 3 Leveraged ETFs For Sinking Energy Stocks(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The investment objective and strategy of each Fund in the table below is currently to seek daily leveraged, or daily inverse leveraged, investment results, before fees and expenses, of 300% or -300%, as applicable, of the performance of its underlying index. Effective after market close on March 31, 2020 each Fund's investment objective and strategy will change to seek daily leveraged, or daily inverse leveraged, investment results, before fees and expenses, of 200% or -200%, as applicable, of the performance of its underlying index, as shown below:
Recent and near unprecedented volatility across global markets, driven by the impact of the COVID-19 pandemic and oil price war, has dramatically increased the explicit and implicit cost of trading in the energy and commodities markets. While volatility will subside at some point, the ability to cost-effectively and efficiently access these markets may remain challenged for some time.
Due to significant market volatility on March 18, 2020 and short selling restrictions, the Direxion Daily Gold Miners Index Bear 3X Shares (DUST) and Direxion Daily Junior Gold Miners Index Bear 3X Shares (JDST) will not have inverse exposure of 300% to the market today. At market open, the Direxion Daily Gold Miners Index Bear 3X Shares and Direxion Daily Junior Gold Miners Index Bear 3X Shares will have inverse exposure of approximately 140% and 130%, respectively.
Leveraged ETFs use the futures markets to magnify the returns of a specific index. These ten leveraged ETFs are the most popular with investors.
The U.S. stock market has been hitting new all-time highs thanks to lower rates, positive earnings surprises and optimism that a resolution to the U.S.-China trade war comes sooner rather than later, notes Frank Holmes, CEO of US Global Investors and editor of Frank Talk.
The many uncertainties that have fueled gold to the recent highs are subsiding. Overall demand for safe havens is waning, which is poised to add to gold's downside pressure, suggests Omar Ayales, resource sector specialist and editor of Gold Stocks R Us.
Gold is soaring this month. In other words, these are dangerous times to be dancing with inverse leveraged gold miners funds, including those targeting junior miners, but data confirm that is exactly what some traders are doing and they are making those bearish bets with the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSE: JDST). JDST attempts to deliver triple the daily inverse returns of the MVIS Global Junior Gold Miners Index (MVGDXJTR).
For traders loving leverage with gold miners exchange-traded funds, the Direxion Daily Gold Miners Index Bull 3X Shares (NYSE: NUGT) has been the place to be. As was noted last week, traders have been embracing NUGT's bearish cousin, the Direxion Daily Gold Miners Index Bear 3X Shares (NYSE: DUST), in a big way, a theme that has continued over the past several days.
The Direxion Daily Gold Miners Index Bull 3X Shares (NUGT), one of the most heavily traded leveraged exchange traded funds, is on a tear. NUGT is up 13.45% over the past week and higher by more than 45% this month, prompting some market observers to speculate the fund could be poised for a breather. NUGT seeks daily investment results, before fees and expenses, of 300% of the daily performance of the NYSE Arca Gold Miners Index, according to the fund’s fact sheet.
The NYSE Arca Gold Miners Index (GDMNTR), one of the most widely followed gauges of gold mining equities, is flat over the past week, but if leveraged exchange-traded funds prove to be accurate guides, ...
Once Bitcoin spiked liked energy levels after a can of Red Bull near the end of 2017, it also came crashing down in 2018, but 2019 is seeing the leading cryptocurrency rise over 150 percent to its current price of just under $8,700. “A lot of people got suckered into this pump-and-dump scheme because they heard all the stories about young kids taking their Bar Mitzvah money into bitcoin and bought a Lambo," said Schiff at the 2019 SALT Conference. Bitcoin purveyors have often referred to the cryptocurrency as the new replacement of gold.
DUST seeks daily investment results before fees and expenses of 300 percent of the inverse of the daily performance of the NYSE Arca Gold Miners Index. Furthermore, investors can consider funds like the VanEck Vectors ® Real Asset Allocation ETF (RAAX) .
Volatility and uncertainty has resulted in a strong demand for leveraged and inverse-leveraged ETFs as these could fetch outsized returns on quick market turns in a short span.