Higher interest rates would help widen the difference between what banks charge on loans and pay on deposits, which would boost earnings for the financial sector. Regional banks are among the stocks most positively correlated to rising interest rates because higher rates improve net interest margins.

The Direxion Daily Regional Banks 3x Bull Shares (NYSEArca: DPST) can capitalize on short-term views on further strength in the financial sector while the Direxion Daily Regional Banks 3x Bear Shares (NYSEArca: WDRW) is a triple-leveraged bearish play on regional banks.

“Earnings results from regional banks like Cullen Frost, Texas Capital, BB & T and Fifth Third Bank have shown a strong trend toward increasing corporate and individual loan accounts, a tactic helped by legislation under consideration that would ease Dodd-Frank lending restrictions and stress tests put in place after the 2008 financial crisis,” according to Direxion. “Many have already anticipated the actual impact of these changes. However, Fifth Third credited its strong Q1 to its efforts in building those accounts.”

For more information on the banking sector, visit our financial category.