TNA is typically used as an aggressive bullish play by institutional portfolio managers and traders who want to leverage exposure to an upside move in the Russell 2000. The trade will work best in a trending bull market, especially if the market (and subsequently the Russell 2000), were to rise in consecutive sessions, and in that case, it is very possible that holders of TNA could realize greater than three times the return of the spot index returns, as the daily leverage would
factor in their favor.
However, as we have pointed out before in these write-ups, any choppiness in the market can be harmful to overall returns when using leveraged funds due to effects of daily compounding and the nature of how these funds are designed.
In any case, there is no denying that an institutional player or players have been gobbling up shares of TNA in recent sessions and it remains to be seen how small caps fare through the remainder of 2011.
Direxion Daily Small Cap Bull 3X
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