Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ) — This fund seeks daily investment results of 300% of the inverse of the price performance of the Russell 1000 Index. The fund normally creates short positions by investing at least 80% of net assets in financial instruments that provide leveraged and unleveraged exposure to the index.
Just as the S&P 500 had a reversal yesterday, so did BGZ. In addition to a reversal, the stochastic issued a buy signal.
Traders may want to buy this highly leveraged inverse ETF as a day trade with an objective of $13.50.
Leveraged ETFs seek to deliver multiples of the performance of a benchmark. Inverse ETFs seek to deliver the opposite of the performance of a benchmark. Returns over longer periods will likely differ in amount and even direction. So these products require active monitoring and management, as frequently as daily.
Keep in mind that leveraged and inverse ETFs entail unique risks, including but not limited to: the use of leverage, aggressive and complex investment techniques, and the use of derivatives. Therefore, they are not suitable for all investors.
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