|Bid||108.51 x 1000|
|Ask||109.00 x 1100|
|Day's Range||108.38 - 115.31|
|52 Week Range||33.20 - 1,052.40|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-86.95%|
|Beta (5Y Monthly)||3.28|
|Expense Ratio (net)||1.12%|
The stock market's recent volatility has brought about a new generation of traders who use low-cost brokers in order to place trades via apps. But with many of the barriers to trading removed, quite a few novice traders have decided to dive in the deep end using complex investment vehicles to make a quick buck. Increasing interest in Direxion Daily Junior Gold Miners Bull 2X ETF (NYSEARCA:JNUG) stock is a perfect example.Source: Shutterstock Data from millennial-favorite trading app Robinhood shows that JNUG was one of the app's most popular ETFs, with more than 43,000 investors adding it to their holdings. The platform also noted that it believes its users could make up a significant portion of the leveraged ETF's holders. Why JNUG is Riddled With RiskLeveraged ETFs are often regarded as sophisticated investment vehicles that should be left to the pros, or at the very least, seasoned day-traders. There are a few reasons for that, one of them being the discipline and understanding investors need in order to use them properly. InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs InvestorPlace's Tezcan Gecgil laid out in detail earlier in May, JNUG isn't a simple bet on gold. It tracks the MVIS Global Junior Gold Miners Index and aims at delivering a 200% or -200% return for that index each day. Importantly, the 'single day' aspect of JNUG's leverage means it's not a stock you can add to your portfolio and hold on to because the losses will add up. * 7 Great Biotech Stocks to Buy and Hold Now Plus, the gold miners JNUG is investing in are some of the riskiest in the business. Add in ongoing gold price volatility and you have a recipe for a nail-biting investment vehicle that isn't worth the headache for 9 out of 10 retail investors. First Time Traders Dive in DeepWhat's troubling is the fact that Robinhood's user base is primarily made up of retail investors. In fact, the firm even claims most of them are trading stocks for the first time ever. It's hard to imagine any scenario in which Robinhood's traders should be picking up JNUG stock -- unless they're day traders.The lockdowns gave people more time to take an interest in their financial health, and many have pursued investing as a result. But the sudden leap into risky investments like JNUG stock and bankrupt rental car company Hertz (NYSE:HTZ) has been unexpected.Anecdotal evidence suggests that some of the interest comes from ex-sports betters who are used to taking on a great deal of risk. This brand of traders is best characterized by Dave Portnoy of Barstool Sports, who has been trading since the March crash and updating followers on his bets via videos uploaded to social media. Leave Gambling Out of ItAs I mentioned before, there's definitely a market for JNUG stock, but not a huge one. And certainly not one for first-time retail traders. The leveraged ETF is better left to more experienced traders who have the time and dedication to use it in addition to other investment vehicles.Robinhood and the plethora of other low-cost trading platforms have been a huge step forward in making investing more accessible to the masses. But the flip side of that coin is that many people are taking on a huge amount of unnecessary risk. While it can be tempting to make big, risky bets in hopes of a large payoff, for the average investor, slow and steady growth is the best strategy. Find Another Way to Buy GoldIf buying gold for protection is your aim, JNUG stock couldn't be further from the goal. Instead, there are a lot of ways to use gold as a defensive play in your portfolio. SPDR Gold Shares (NYSEARCA:GLD) is an ETF that tracks the performance of gold bullion itself. There are others like the Sprott Gold Miners ETF (NYSEARCA: SGDM) that offer exposure to mining companies. For those who are interested in taking on a bit more risk (but perhaps not as much as JNUG stock has to offer), there's the VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDX). Laura Hoy has a finance degree from Duquesne University and has been writing about financial markets for the past eight years. Her work can be seen in a variety of publications including InvestorPlace, Benzinga, Yahoo Finance and CCN. As of this writing, she did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post JNUG Stock is a Terrible Investment For Most Types of Traders appeared first on InvestorPlace.
In 2020, one of the most trusted asset classes has possibly been gold, with the shiny metal up about 13%. One way to play the recent gold rush is a leveraged exchange traded fund, such the Direxion Daily Jr. Gold Miners Bull 2X ETF (NYSEARCA:JNUG). Year-to-date, JNUG stock is down about 87%.Source: Shutterstock JNUG tracks the MVIS Global Junior Gold Miners Index (MVGDXJ). And it seeks a 200% or -200%, i.e., 2X, of the return of this benchmark index for a single day. This daily leverage gives JNUG certain characteristics that may make it a rather inappropriate long-term holding for most retail investors.Let's see why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips JNUG Stock is a Leveraged ETF (LTEF)Many investors are familiar with a wide range of exchange traded funds that enable them to track the price of the commodity. Examples include the SPDR Gold Shares (NYSEARCA:GLD) or SPDR Gold MiniShares SPDR Gold MiniShares (NYSEARCA:GLDM). Year-to-date, they are up 14% each.There are also investment funds that invest in various miners, such as the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) or the VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ). In 2020, they are up 23% and 12% respectively. * 7 Excellent Penny Stocks Ready to RoarIt is important to remember that JNUG stock is a leveraged exchange traded fund (LTEF). Two of the most popular LTEFs include JNUG and the Direxion Daily Gold Miners Bull 2X ETF (NYSEARCA:NUGT). And leverage makes the long-term performance of both JNUG and NUGT differ than the performance of the underlying assets. Similar to JNUG stock, NUGT is also down 55% so far in the year.Put another way, although GLD, GLDM, GDX and GDXY are up considerably so far in 2020, the same is not true for either JNUG or NUGT. Similarly, MVGDXJ, the index that JNUG tracks is up 13% in 2020.Over the past five months, these leveraged exchange-traded funds have not at all performed like the ETFs that track either the commodity of various gold miners.This discrepancy in long-term returns is due to the daily leverage used. How Leveraged ETFs WorkA 2X leveraged ETF like JNUG stock is structured to be constantly 2X leveraged on a daily basis. This 2X long LTEF needs to buy every day underlying asset prices go up, and sell when they go down.The leverage is achieved through the use of rather sophisticated financial instruments, such as swaps, futures, and options. However, the daily resetting involved in JNUG stock is rather complex and makes it a no-go as a long-term holding. The compounding effects of daily returns work against long-term investors.JNUG stock also has a "bear inverse" ETF, i.e., Direxion Daily Jr. Gold Miners Bear 2X ETF (NYSEARCA:JDST). Simply stated, JNUG stock is 2X bull and JDST stock is 2X bear.Let's compare the performance of both indices as of March 31, 2020: * 5-year return: JNUG -52.90% and JDST -80.37% (i.e., both returns are negative) * 3-year return: JNUG -68.8% and JDST -63.7% (i.e., both returns are negative) * 1-year return: JNUG -92.0% and JDST down -92.8% (i.e., both returns are negative)In theory, short-term (possibly day) traders could consider JNUG stock to go long smaller gold miners and JDST to go short.But looking at the performance over time, long-term traders should not consider JNUG stock to go long. Instead it looks as a vehicle of wealth destruction. How is that possible?Let's see an example. For example, if the underlying index MVGDXJ moves down 5% on a given day, then JNUG stock should move down 10%. If we assume a stock price of $10, JNUG should be down to about $9 after the first day.On the second day, if the MVGDXJ moves up 5%, over the two days the MVGDXJ return will be -0.25%. A long-term retail investor may think JNUG should be down 0.5%. Yet, the 10% increase on day two will bring shares up from $9 to $9.90, and the JNUG stock would, in reality, be down by 1%.And any investor who holds these leveraged ETFs for a long-period will find out that his or her capital would eventually be eaten up by this volatility and daily re-balancing. Thus JNUG stock can only be appropriate for experienced short-term traders looking for leverage and volatility. The Bottom Line on JNUG StockBefore you decide to buy leveraged ETFs, such as JNUG stock, it'd be extremely important to understand how they work, with an emphasis on their drawbacks. The use of leverage as well as volatility give their unique properties to these funds. Gold is quite a volatile commodity, and gold miners are a leveraged play on gold prices.Therefore, the long run returns of a 2X ETF like JNUG stock are rather dangerous and unpredictable. Even if the underlying index moves in favor of the LTEF, JNUG stock might still lose considerable value over the long term.As you increase your knowledge base on these leveraged exchange-traded funds, you may quickly realize that LETFs are likely to be more appropriate for professional traders for hedging purposes than buy-and-hold retail investors.Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Be Careful Using Leveraged JNUG Stock to Buy Gold appeared first on InvestorPlace.
Direxion has announced it will execute a reverse split of the issued and outstanding shares of twelve ETFs (each, a "Fund" and collectively, the "Funds"). The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.
The investment objective and strategy of each fund in the table below is to now 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:
Due to recent market volatility and related developments, 10 funds will be underexposed to the market today. At market open, each fund will have the following exposure. This reduced exposure is for today, March 31, 2020, only.
Due to recent market volatility and related developments, four funds will be underexposed to the market today. At market open, each fund will have the following exposure. This reduced exposure is for today, March 30, 2020, only.
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:
Due to significant market disruption and volatility, the Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG) will not have exposure of 300% to the market today. At market open, the Direxion Daily Junior Gold Miners Index Bull 3X Shares will have exposure of approximately 260%. This reduced exposure is for today, March 27, 2020, only.
Due to significant market disruption and volatility on March 24, 2020, the Direxion Daily Gold Miners Index Bull 3X Shares (NUGT) and Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG) will not have exposure of 300% to the market today. At market open, the Direxion Daily Gold Miners Index Bull 3X Shares and Direxion Daily Junior Gold Miners Index Bull 3X Shares will have exposure of approximately 220% and 220%, respectively. This reduced exposure is for today, March 25, 2020, only.
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.
While gold prices plummeted roughly $80 as most asset classes are tanking after coronavirus panic has spiraled out of control, the precious metal may still be working as it is supposed to be according to some experts.
Gold prices touched a 7-year high as more coronavirus concerns continue to fuel a safe haven flight to assets like precious metals. “So far ... gold has demonstrated its safe-haven qualities and we stay long the metal,” UBS analysts led by Wayne Gordon said.
In the capital markets, the term “black swan” is not to be taken lightly, unless you're a bullish gold trader--then it's time to get heavy on precious metals. The coronavirus is putting a mixed martial arts-like stranglehold on the markets and if it turns into a black swan event in China or other parts of the world, it could spark a gold rally. “For gold really to move, it would be some kind of exogenous shock, which might push it higher,” Rhona O’Connell, INTL FCStone head of market analysis for EMEA and Asia Regions, told Kitco News.
Gold prices have been relatively muted as investors are reading into Federal Reserve Chairman Jerome Powell’s neutral tone on the economy and the remaining wild card in the markets known as the coronavirus. Gold prices are slowly facing downward pressure as a risk-on sentiment creeps back into the markets following lesser cases of the coronavirus occurring. Tuesday is the first day of Powell’s testimony before Congress.
As the coronavirus outbreak continues to be the wild card in the markets, the safe haven of precious metals is in high demand, especially for exchange-traded funds (ETFs) that are backed by gold. ETFs have been stockpiling gold as more coronavirus news continues to invade the financial markets. The ETFs trade like a stock but track the price of gold, with the commodity put into storage to back the shares.
While the U.S. markets seem to push the coronavirus outbreak from the forefront of their worries, China continues to struggle with its effects as more cases of the virus surface and claim more lives. This is pushing precious metal prices like gold steadily higher. Asian and European shares were higher overnight as traders and investors at least for now have pushed aside the coronavirus outbreak in China.
The Federal Reserve decided to keep rates unchanged on Wednesday and this could be gold’s main driver going forward if the data-dependent central bank deems the economy healthy enough. This could support gold prices even if the market experiences a lull in precious metal purchases after the coronavirus craze eventually fades. Amid the outbreak, it was risk-off for investors as they piled into safe havens like bonds and gold.
Thanks to as much as a 500-point drop in the Dow Jones Industrial Average in Monday’s trading session, it was risk-off for investors as they piled into safe havens like bonds and gold. Gold was on a path of bearishness after a U.S.-China “phase one” trade deal put the risk back into the markets. “After almost three weeks of consolidation, gold has now pushed higher on risk-aversion as the Coronavirus position worsens and the markets move away from risk,” said Rhona O’Connell, head of market analysis for EMEA & Asia at INTL FCStone, in a daily note.
Bond prices went higher, inversely causing yields to fall, but the safe-haven scramble couldn’t make its way to gains for gold as concerns regarding the coronavirus in China made its way into the capital markets. The gold market reacted negatively as China is a major purchaser of the precious metal. “This unfavourable development could not come at a more critical time with many people expected to travel within China before the Lunar New Year,” wrote Lukman Otunuga, senior research analyst at FXTM, in a daily research note.
Some commodities market observers believe that trend will continue in 2020, potentially spelling opportunity for nimble traders with geared ETFs such as the Direxion Daily Gold Miners Bull 3X ETF (NUGT) and Direxion Daily Jr Gold Miners Bull 3X ETF (JNUG) . NUGT seeks daily investment results, before fees and expenses, of either 300% or 300% of the inverse (or opposite), of the performance of the NYSE Arca Gold Miners Index. JNUG seeks daily investment results, before fees and expenses, of 300% of the performance of the MVIS Global Junior Gold Miners Index.
While most were preparing for Thanksgiving dinner on Thursday, palladium investors were feasting off gains as the precious metal reached $1,841. Analysts are already predicting that the precious metal ...
Bullish gold traders didn’t get the news they wanted when the most recent Federal Reserve minutes revealed that more rate cuts may not be on the horizon, which could feed into lower gold prices. Last month, the central bank instituted its third straight rate cut by 25 basis points—a reversal from last year’s four straight rate hikes. “Federal Reserve officials generally agreed that they likely won’t need to cut interest rates again unless economic conditions change significantly, according to minutes released Wednesday from their most recent meeting,” noted a CNBC report discussing the Fed’s most recent minutes in which it cut rates by a quarter point last month.