Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ) — This fund seeks daily investment results of 300% of the inverse 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, in combination, provide leveraged and unleveraged exposure to the Russell 1000.
The S&P 500 is on the verge of a breakdown, so traders may want to buy this highly leveraged ETF as a one-week trade with an objective of $13.
The trade would be triggered by either a close below S&P 500 1,174 or a break by BGZ through $11.
Please be aware that leveraged inverse ETFs entail unique risks, including but not limited to:
- The use of leverage;
- Aggressive and complex investment techniques; and
- The use of derivatives.
Inverse ETFs seek to mirror the opposite of the performance of a benchmark, but returns over longer periods will likely differ in amount and even direction. These products require active, sometimes daily, monitoring and management. They are not suitable for all investors.
The Trade of the Day is not a fee-based managed portfolio, so traders must monitor their own entry and exit prices.
If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.
