2 Leveraged ETFs to Consider as Tesla Invests in Mexico | ETF Trends

Electric automaker Tesla is looking to build a factory in Mexico, which could help prop up a pair of exchange traded funds (ETFs) — the Direxion Daily TSLA Bull 1.5X Shares (TSLL) and the Direxion Daily MSCI Mexico Bull 3X Shares (MEXX).

Per a Reuters article, Tesla plans to “create up to 6,000 jobs at its first Mexican automotive factory and is considering producing batteries in the center of the country as it eyes further investment, senior Mexican officials said on Wednesday (March 1).”

“Mexico’s government said on Tuesday Tesla had chosen the northern state of Nuevo Leon for a first Mexican factory worth more than $5 billion, and Tesla boss Elon Musk is expected to give details in an Investors Day presentation on Wednesday,” the Reuters article added.

Despite inflation and rising interest rate fears creeping back into the capital markets, Tesla’s stock has been a strong performer. The stock is up almost 90% year-to-date, and an investment in Mexico puts more growth potential on the electric automaker, which should appease short- and long-term investors.

“(Musk) is interested in investing more in Mexico,” Mexican President Andres Manuel Lopez Obrador said — the Reuters article mentioned that Musk and President Lopez Obrador said that they had discussed plans to develop the Isthmus of Tehuantepec in southern Mexico.

Leveraging a Pair of Options

Given this latest development, traders who are bullish on Tesla can add leverage via single-stock ETFs from Direxion Investments. In particular, TSLL adds 50% more exposure to maximize gains when Tesla’s stock heads upward — as mentioned, so far it has been this year.

On the other hand, MEXX takes a more broad approach for traders who sense bullishness due to macroeconomic factors affecting the country. For example, Tesla’s investment in Mexico would be a boon for job creation, and thus, MEXX could see a jump in the short term.

With its triple leverage ability, MEXX seeks daily investment results, before fees and expenses, of 300% of the daily performance of the MSCI Mexico IMI 25/50 Index. Thrice the leverage means that only experienced traders should consider this fund or any fund with leverage of any kind.

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