Direxion Triple Leverage Funds

[Art2Gecko]

Lol, WOW did that BGZ TANK at the EOD yesterday, holy moly..

[xZx]

thanks for the heads up... can't wait to see how an agriculture fund would trade. :) lol

[Ace of Spades]

In their SEC filling....they already filled for 36 tripple leverage funds, but they're not sure when or if they will laundch them all...here is the link

http://seekingalpha.com/article/75570-direxion-files-for-36-new-funds-including-triple-leveraged-etfs?source=financialcontent

Direxion Files for 36 New Funds Including Triple-Leveraged ETFs
by: Index Universe May 04, 2008

By Heather Bell
A new filing by Direxion Funds could seriously up the ante in the realm of leveraged exchange-traded funds. The firm, which is known for its leveraged index mutual funds, has filed 36 proposed ETFs with the Securities and Exchange Commission.

There's been a lot of activity in the leveraged funds market lately, but these funds take the concept to the next level - they offer three times the performance (or three times the inverse) of the daily performance of the indexes they are tied to. This means that the proposed Direxion S&P 500 Bear 3X Shares, for example, will offer three times the inverse of the daily performance of the S&P 500. Currently, available ETFs offer no more than double exposure to their underlying indexes, whether they be leveraged or inverse funds.

Direxion currently offers the most-magnified exposure among leveraged index mutual funds, says Direxion Vice President and Marketing Director Andy O'Rourke. The firm has a few funds that offer 2.5X their underlying benchmark, but none so far that offer triple exposure.

The leveraged ETFs would achieve their promised returns by investing in futures, swaps and other derivatives, while the inverse funds would engage in short sales to do so. The funds would cover a variety of asset classes, including sectors, international regions, foreign countries, domestic benchmarks, real estate and even "commodity-related" stocks.

In addition to the S&P 500, the filing covers Bull and Bear ETFs for each of the following indexes:

MSCI Broad Market Index
Nasdaq-100
Dow Jones Industrial Average
S&P MidCap 400 Index
Russell 2000 Index
Nikkei 225 Index
MSCI EAFE
MSCI Emerging Markets Index
S&P BRIC 40 Index
FTSE/Xinhua China 25 Index
Indus India Index (which underlies the new PowerShares India Portfolio)
S&P Latin America Index
MSCI Commodity-Related Equity Index (which covers stocks in commodity-related industries)
Energy Select Sector Index
Financial Select Sector Index
Dow Jones U.S. Real Estate Index
S&P U.S. Homebuilding Select Industry Index
That's a lot of funds, but O'Rourke said the firm has not decided if it will launch them all, noting "Nothing is set in stone." As it is, he said the registration period will most likely last at least through the summer. That means Direxion could be looking at entirely different market conditions by the time the funds are ready to be brought to market.

The prospectus lists the management fees for each ETF at 0.75%. Should that represent the total expense ratio at their launch, the funds would be 20 basis points cheaper than ProShares' entire stable of leveraged and inverse ETFs, while offering even more intense exposure. Rydex also offers 200% leveraged and inverse ETFs at the 0.75% price point.

But the real question is whether ETF investors will be interested in this kind of fund. Certainly ProShares has proven that leveraged and inverse ETFs can find an audience - the firm has accumulated a combined total of about $17 billion in assets in its more than 60 ETFs since it began launching them in June 2006. But triple exposure might be seen by some investors as a wee bit... volatile?

At least in the U.S. volatility levels have been increasing recently (just check out the VIX), so a fund that multiplies the daily performance of an index by three is looking at some potentially abrupt movement. But then again, investors looking at leveraged funds aren't exactly running in terror from the spector of volatility as it is, so the promise of even greater returns could very well outweigh risk concerns.

At the very least, it's interesting...

[J-RO]

ERX ~> Looks Good For A Swing

[xZx]

ERX... big money loaded it today ~~~>

this one beats the hell out of DIG imo...

[xZx]

BGU is the monster now:

check out that volume flag..! :)

[Art2Gecko]

yeah, saw that... dude's a trip..lol

[J-RO]

BGZ ~> Has been running like a wild stallion ~> OT: kinggkongg is back on the momentum players board lol

[Art2Gecko]

BGZ continuing to rock.

[PCola77]

BGU down 6%, and DOW down only 1/2%. I'm planning to load up on that when we I thikn we hit a bottom, so I hope we get 10x return on the upside as well :P

[xZx]

BGZ has been my core holding lately. am slowly adding BGU into the run, plus nibbling on ERX, but i think there's room for the short side to play out further.

imagine what a rocket the long shares will be once a bottom has been put in on the dow and in crude oil. :)

[Art2Gecko]

BGZ is kicking azz
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33407532

[mwfox]

Nice board here. I'm giving BGU a try today. In at 40.5. We'll see how it goes.

[PCola77]

BGZ would have been a hell of a buy the day it started trading. Wish I had that kind of foresight.

[J-RO]

Way to reach out - Thats great news!!!

[xZx]

i spoke with a rep at direxionshares today and they said they'll have more sectors available after the new year: clean energy, technology, homebuilders, real estate, BRIC countries, china specific, india specific, latin america, and european nations.

i told them to make sure they put the clean energy fund at the top of the list and they took my vote.

[xZx]

TNA got some nice volume at EOD:

[GobsoGreen]

definitely a very good way to do it. and with the leverage you will be able to take advantage of the swings very quickly too!

i probably will test it out for a few weeks, then dive in when the spreads start to tighten up more.

[xZx]

i'm thinking of playing both sides at once and fading one while i add the inverse. this market will probably be range bound for quite some time. jmho.

[GobsoGreen]

hah penny ETF's lol, these are gonna be fun to trade. i just watched it today but i might actually seeing how these go next week. looks like, even with this volume, its actually be moving in tandem with similar ETF's.

[xZx]

i'm thinking of these direxion shares as big board versions of penny stocks. viewed through that lens they seem very stable. :) lol

[Art2Gecko]

BGZ/BGU moving like clockwork... this should be pretty interesting going forward..

[Art2Gecko]

looks like its time to sell BGZ, and buy BGU

[Art2Gecko]

I think that's accurate for most here.. they've been alive what, 2 days so far now? lol

[vizsla4084]

I assume that folks are just watching

how these Direxion funds behave for a while before actually jumpimg in the water, right ?

[Art2Gecko]

Hmmmmm, not sure it the djia is gonna turn back up or not after this....

October job losses worse than feared
Fri Nov 7, 2008 8:37am EST Email | Print | Share| Reprints | Single Page | Recommend (2) [-] Text [+]

1 of 1Full SizeWASHINGTON (Reuters) - Employers cut payrolls by 240,000 in October, much more severely than expected, while September registered the biggest monthly loss in jobs in nearly seven years, according to a government report on Friday that showed labor markets were sharply deteriorating.

The Labor Department said the national unemployment rate shot up to 6.5 percent from 6.1 percent in September, the highest since March 1994.

October's job cuts were much worse than anticipated by Wall Street economists who had forecast 200,000 would be lost. Even more strikingly, the department revised September's losses to 284,000 - the highest since November 2001 just after the September terror attacks - and also revised August losses higher to 127,000.

That meant 179,000 more jobs were cut in August and September than previously had been thought. In total over the three months through October, 651,000 jobs have been slashed from payrolls.

In manufacturing alone, a whopping 90,000 jobs were cut in October - a period when 27,000 Boeing Co. assembly workers were on strike. That followed a loss of 56,000 factory jobs in September.

(Reporting by Glenn Somerville, editing by Neil Stempleman)

[Art2Gecko]

Well, lets see if the DJIA hourly MACD bottoms and turns today.. will be interesting to see how these ETFs react..

[J-RO]

Whew, only a lil' bit of volatility, lol.

[MossyOak]

Looking forward to it.......!! Everyone have a restful week end, been a heck of a week.........LOL

[xZx]

nice to see you here, 4mars. yesterday on CNBC bob pisani mentioned these 3x funds. i give it a month or two and they'll be more liquid than their proshares counterparts. that oughta tighten up the spread even more... :)

[MossyOak]

Works for me!!

[MossyOak]

Nice board here, Brikk told me about these "new" funds the other day!! Looking forward to watching the board and stepping in and trying these new funds out. Like you were stating, a person could play both of these against one another all day long..............

[xZx]

they've only been trading for two days and during that time i've seen the spread tightening. occasionally intraday i find the bid or ask ticking up to a very wide spread, but then they tighten it right up a few seconds later.

i'm sure we'll see all of these getting more liquid by EOW. clearly there's plenty of demand for this kind of leverage. lol

[xZx]

they trade just like a regular stock.

[GobsoGreen]

options, now we're talking! this is gonna be a roller coaster over here...
how has the spread been during trading hours?

[vizsla4084]

Do the Direxion Funds trade ...

like the Ultra ProShares EFTs or more like a mutual fund?

Meaning more like a stock, and you can get in and out intraday, or more like a mutual fund and can only get end of the day pricing?

Thanks.

[xZx]

TNA/TZA 10day/10 min charts ~~~>

small cap bull:



small cap bear:

[k9painter]

cant wait for the options on these bad boys!!!!

[Profe$$or]

Board marked. I can't wait to play these

[xZx]

BGU/BGZ 10 day/10 min charts ~~~>

in two weeks these charts will display the full range.

large cap bull:



large cap bear:

[GobsoGreen]

yes, thanks for setting this up! so, you guys thinking a few months for these to start really picking up?

[Stock]

No volume yet. I would give them 6 months before you see decent spreads, if the ProShares ETFs are any guide.

[Art2Gecko]

have never traded them before. should be interesting.

[nitetrak]

Best of luck Art. Can't get enough of these leveraged funds lately. I've always done better with Profunds, Rydex, and Direxion ETF/Funds.
Dont know why I even fool with anything else. Ya I know why...lotto penny greed..lol
Why throw 1k at a lotto and make a 2 bagger, when you can throw 5x that amount and make a quick 20%. Same difference in profits but the latter is much easier to do, IMO.
nitetrak

[Art2Gecko]

Check it out... Here's the DJIA hourly chart with BGU and BGZ superimposed... wicked cool man...




may have to put this puppy in the ibox

[camper9]

3X Exchange-Traded Funds

One person's opinion:

http://www.ritholtz.com/blog/2008/11/3x-exchange-traded-funds/


When we made our[1] buy 'em call on October 10th, we wanted to avoid single stock risk. And, we wanted to have prudent exposure, while still maintaining some cash levels. Our solution was to deploy enough cash into 2 to 1 leveraged funds on the S&P (SSO) and the Nasdaq 100 (QLD) so that our [2] managed accounts were 50% cash, and 100% effective market exposure. That worked out well.

Now, along comes an even more aggressive ETF: Triple upside and downside exposure. I have no opinion of these, as I have not really worked out the usages of this. It does seem a bit excessive, and my friend [3] Paul absolutely hates them.

Here is the full run of triple leverage ETFs. I wonder if Rydex will come out with a competitive product or not.

Fund Name . . . Symbol . . . Benchmark . . . Leverage

Direxion Bull Funds

• Large Cap Bull 3x
(BGU) Russell 1000 Index 300%

• Small Cap Bull 3x
(TNA) Russell 2000 Index 300%

• Russell 1000® Energy
(ERX) Energy Bull 3x Shares Index 300%

• Financial Bull 3x Russell 1000 Financial Services Index
(FAS) 300%

Direxion Bear Funds

• Large Cap Bear 3x
(BGZ) Russell 1000 Index -300%

• Small Cap Bear 3x
(TZA) Russell 2000 Index -300%

• Russell 1000 Energy
(ERY) Energy Bear 3x Shares Index -300%

• Financial Bear 3x Russell 1000 Financial Services Index
(FAZ) -300%

>



Previously:
[3] Paul Disses the Triple Leverage ETF (Video)
http://www.ritholtz.com/blog/2008/11/triple-leverage-etf/

[1] 10 Bullish Charts, Signals, Indicators (October 10, 2008)
http://www.ritholtz.com/blog/2008/10/10-bullish-charts-signals-indicators/

Source:
[4] Innovative Funds Benchmarked to Help Advisors and Investors Seeking to Outperform
Nov 03, 2008 11:41 ET
http://www.marketwire.com/press-release/Direxion-Funds-916219.html

[Art2Gecko]

exactly.. and seems with these particular ETF's we're here at the beginning. will be interesting to see how their charts actually track with the djia..

[J-RO]

Gotcha marked here, Art. Sweet board.

[saj]

specially with the daily volatility

[Art2Gecko]

seems like the BGU/BGZ pair will have the highest volume.. Guess one just watches a DJIA hourly chart and just flip back and forth between these tickers at or near the inflection points.