A volatile S&P 500 due to the latest news on the COVID-19 Omicron variant could bring more ping-pong action with two leveraged exchange traded funds (ETFs) from Direxion Investments.

The new variant brings an element of the unknown to the S&P 500, which means that the index is open for volatile swings. While this isn’t for the weak at heart when it comes to risk, savvy traders can take advantage of the moves and amplify their gains with leverage.

“There’s clearly only topic of conversation for the financial markets this week,” David Dierking wrote in The Street. “The announcement of the omicron variant of the COVID virus put investors into a panic and sent the S&P 500 to its largest single day loss since February and the Russell 2000 to its largest single day loss since June of last year.”

“The reveal of a potentially more mutated and more highly contagious version of both the original COVID strain and the delta variant brought investors back to the early days of the pandemic when businesses, schools and other groups were suddenly forced to shut down,” Dierking added.

Playing Bull or Bear in the S&P 500

A fearful market means that the index will be susceptible to any market news, whether positive or negative. How the markets digest the news will determine if traders see red or green in the index.

Either way, they can play both sides. For the bulls, traders have the Direxion Daily S&P 500® Bull 3X Shares ETF (SPXL).

Traders looking to ride the crest of the S&P 500 wave with leverage can do so with the bullish SPXL. It invests at least 80% of its net assets in financial instruments, such as swap agreements and securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.

When the crest peaks and the index falls, traders can take the other side with the Direxion Daily S&P 500 Bear 3X ETF (SPXS). SPXS seeks daily investment results equal to 300% of the inverse of the daily performance of the S&P 500 Index.

SPXL ChartFor more news, information, and strategy, visit the Leveraged & Inverse Channel.