How Tactical Traders can Profit From Volatility

I think a lot of people, when they think of ETFs, they think of many stocks in one or a basket of stocks. So the single stock ETF is a relatively new concept, is it not?

Yeah. These came live back in 2022, and really this past year in particular, you've seen incredible growth. One of our largest funds as a firm is actually our 2x Tesla fund, TSL. If you think about it, I've mentioned Tesla, Palantir, Meta; these are all names that oftentimes see volatile trading periods.

For tactical traders with conviction, buying a 2x fund or going short with a negative 1x fund is a great way to make profit on quick, short, directional trades. Again, these are not buy-and-hold investment vehicles. This leverage resets daily. The same we like here at Direxion is the trend is your friend.

So if you're long a 2x fund and the market is just one directional bull market, great, you can make a great profit. But if markets get choppy, you see real volatility, or the market runs against you, that compounding works against you as well. So, we really do like to reiterate these are tools meant for tactical traders.

For traders looking to learn more, go to our website, direxion.com, go to our Direxion University, and unpack some of the resources there to better understand how these fit your broader portfolio.