We have experienced a tumultuous year, but heightened market volatility also creates opportunities for savvy traders to aim to capitalize on market gains or pains. As markets continue to oscillate, traders can turn to leveraged and inverse strategies in tactical ways to help manage their risks.
In the upcoming webcast, Tactical Trading: How To Play The Field When The Markets Zig-Zag, David Mazza, managing director and head of product at Direxion, Ed Egilinsky, head of alternatives at Direxion, and Joe Maas, CIO at Synergy Asset Management, will outline the risks that the markets face today and highlight tactical strategies to help traders and financial advisors better manage risks in these challenging conditions.
For example, the Direxion Daily S&P 500® Bull 3X Shares ETF (SPXL) has helped investors access 3x or 300% of the daily performance of the S&P 500 as the broad market rebounds. On the other hand, the Direxion Daily S&P 500 Bear 3x Shares (SPXS), which takes -3x or -300% of the daily performance of the S&P 500, has been one way to capitalize on the recent market pullback.
For those with lower risk tolerance, investors may look to bearish or inverse Direxion Daily S&P 500 Bear 1X Shares ETF (SPDN), which seeks investment returns of 100% the inverse of the performance of the S&P 500 Index for a single day. Relative to Direxion’s more highly leveraged 3X products, SPDN allows investors to tactically add a hedge while allowing more room for error if markets do not correct as expected.
It is important to note that the funds should not be expected to provide 100% of the inverse or leveraged long of the benchmark’s cumulative returns for periods longer than one day. And investors should understand the risks associated with the use of shorting or leveraging their long exposure and are willing to monitor their portfolios frequently.
Financial advisors who are interested in learning more about tactical strategies can register for the Tuesday, July 25 webcast here.