Leveraged ETFs: Precision Tools for Tech, Defense, and E-Commerce Traders

What investors seem to be demanding and interested in is its precision, its flexibility, and its optionality.

As the ETF landscape evolves, a new class of products is gaining traction.

Leveraged in inverse single stock ETFs, first introduced in 2022, these funds offer amplified exposure to individual equities while amping up risk and volatility.

So, in this segment, we're going to examine recent trends in this burgeoning ETF category and a few others.

Helping us to get to the bottom of it is Mo Sparks.

He's the chief product officer at Direction.

Mo, thank you for being here.

It's great to see you, >> Ron.

Thanks.

Thanks for having me. >> So, as of mid 2025, the total assets under management invested in single stock ETFs in the US reached almost $ 38 billion.

And of course, direction has been there right from the start. and a leading pioneer in this space.

So before we talk about specific ETF tickers, why have traders and strategic oriented investors been gravitating toward leveraged and inverse single stock ETFs? >> Ron, it's a great question.

You said it at the onset in terms of of growth.

It's growth upon growth in our industry as a whole of ETFs.

And if we look at where we compete across leverage and inverse, you know, we're a clear leader and what we've seen particularly with our single stock franchise is that that franchise is about $10 billion in assets now.

And so it's grown quite rapidly.

And what investors seem to be demanding and interested in is precision, its flexibility, and its optionality, right?

And that's what these tools are built for to deliver on those three points.

And they are they are tools that are tactical in nature.

And so built for traders who are looking to express a view on the markets, whether it's something that's happening in earnings, we're just wrapping up an earnings season.

Clearly been very notable in terms of surprises on the upside, some misses on the downside.

And these tools are built to give those traders an opportunity to play either side. uh and we'll talk to some specific names in a little while but um what we have tried to do is to continue to involve our lineup to support the modern retail trader uh and that is a evolving set of investors and traders and so uh those needs are are changing at all points in time and so we brought a lot of new product to market.

We continue to look at new uh single stock opportunities for companies that we see as emerging and that traders may find to be quite interesting as well as things outside of that which we can touch a bit on later as well. >> Yeah, and traders certainly have been responding to that with the booming assets as well as trading volume.

So, let's talk specifically about some new bull and bear ETFs that direction recently launched linked to Ford Motors, Shopify, Loheed Martin.

Congrats on the recent launches.

So what type of traders might be interested in directions bull and bear ETFs linked to these companies. >> Yeah.

So I think what's interesting about these three names is in some ways non-traditional in terms of how they fit together.

And so you know the through line between Loheed Martin and and Shopify is quite quite wide.

Um, but if you were to look at direction social media, I think we did a very nice job of of highlighting a fighter jet with a a shopping cart on top of it, which makes the story kind of tell itself and sing uh from that perspective.

But as it pertains to the to the underlying names, I think what we see is traders are interested in three companies that are leaders within their given industries.

And so we're thinking about someone like Ford, clearly in the midst of an evolution.

And there's been some more recent news off of uh the second wave of the Model T movement uh within Ford and this Christmas tree assembly line that they're putting together.

A nice social plug as well in terms of I think some of the things that are behind that.

Uh so one who wants to kind of ride the wave from a potential of that that electronic shift happens at uh someone like Ford, there is an opportunity there.

If if one thinks that, you know, the moment maybe has passed for a longtime automotive Americanmade manufacturer, you have an opportunity to to take the other side um from a trading perspective and and and express that short-term view.

With something like Shopify, I think we see an emerging e-commerce company that's really the backbone of a number of not only online sites, but increasingly brickandmortar retailers that exist not only here in the US, but but globally as well.

And so I think offering the same investors and traders an opportunity to be on either side.

Uh and then last as we look at Loheed Martin, I think that you know the news yesterday with with uh President Trump and and uh Mr.

Putin meeting in Alaska is only very telling in terms of the geopolitical landscape is ever evolving and uh at the kind of the nexus of that is none other than aerospace and defense companies.

Loheed Martin here in the US being a leader and so the same trend kind of applies allowing for our traders to seek those opportunities that may present themselves in the market to express a view on either side. >> Yeah, makes sense.

Now beyond Ford Motors, Shopify and Loheed Martin, are there any other maybe that you could mention briefly single stock ETFs from direction that you've seen a real pickup in terms of trading volume and asset flows?

Yeah.

So, our our lineup now has, you know, roughly 40 ETFs and I I mentioned at the onset about $10 billion in assets.

And so, we have kind of a plethora of of options for traders to consider and a set that will continue to kind of grow here.

But, you know, specifically, maybe there's a few that I would highlight.

Um, one I think you'd be hardressed and miss, you know, really what I would say is a category definer in our Tesla product.

TSL long Tesla as well as TSLS for short Tesla.

So taking a a bullish view on the first and a bearish on the second.

And that that fund now or ETF is about $6 billion in assets.

And so really here to stay.

It trades about $2.5 billion every single day.

And so highly liquid, allows for one to come in and out and extremely low cost. and where we started talking about precision and flexibility.

I think that product kind of defines that for us.

And so that is one.

You kind of go down the list and there's a number of new entrance that we've we brought to market that uh I would say are are worthwhile to mention specifically something like Palo Alto Networks recently reported earnings as well. other side of kind of the technology uh evolution and revolution that's taking place here globally is cyber and how one protects themselves and so um we now offer products off of that uh that name as well and then similar vein is someone like Cisco and so we offer a bull and a bear version CSC and CSCS uh for those uh that are looking to express either side of of the the equation as well.

Other few that I'd maybe just spotlight quickly would be, you know, different industry, but really healthcare has been in focus.

Nova Nordis most recently announcing uh a cut in terms of the price of their wonder drug for obesity.

Um state side we have Eli Liy who is a competitor within that marketplace.

Earlier this year, we launched a pair Eel and EI uh for those investors who are very interested in kind of playing news, earnings, sentiment associated with that trend that we're seeing in the marketplace as well.

So, I think that gives kind of a plethora of of options that are out there.

You know, I think one thing that's useful is you can always find all these ETFs at direction.com.

You know, we tend to try to use a common nomenclature with either an L for long or an S for short or a U for up or a D for down to allowing all investors to better understand they're investing in a bullish or bearish manner. >> I like it.

A trader a trader friendly in user interface >> makes sense.

So, let's talk about gold prices which have been trading near all-time highs and I'm curious as to how some of the leverage mining ETFs like NUGT, Nugget and Jug, JNU are responding.

Also, we understand that there's some upcoming adjustments to the underlying index for both Nugget and Jug and of course their uh bearish pairs.

So, tell us more. >> Yes.

Yeah.

Yeah.

And so I think that, you know, it's been hard to ignore uh the continued kind of noise in the marketplace and gold has long been a safe haven for many investors and traders, you know, to to kind of take a moment to breathe.

Uh and what we've we've seen clearly this year is, you know, gold in itself, a rise in terms of price.

Naturally, one would think that that would also correspond to interest in something that is a bull or a bear. uh particularly on the bull side for those that have been looking to profit or or bear, those that maybe are taking uh a directional bet that things may be going another way in time.

And so we've seen elevated volumes across the lineup of of the four pairs that we have on on both gold miners as well as junior gold miners.

And then as you spotlighted, yeah, all products sometimes go through a change.

And so um for for Dust actually in the process of an index conversion and so you know that product is uh built off of an existing ETF.

Uh that ETF made an index change and we made the decision after careful consideration to go ahead and and transition um with the underlying ETF uh to the new index for an end trader.

Really no difference in terms of expectation.

And what you still have is very liquid index, highly tradable.

All the qualities that one was looking for in that product will carry over.

Uh that's a change that's set to take place in midepptember.

Again, if everyone's looking for any news about that change or specific questions, you can always go to direction.com to learn more. >> One final question, Mo, before you take off.

Uh with 10 out of 11 S&P 500 sectors up this year, it might be 11 last last time I checked.

I don't know.

We're close, but bulls are very much in control.

Uh the top three performing S&P 500 sectors as far as uh industry groups, you've got technology, communication services, the industrial sector.

We've also got the healthc care group which has been a lagard making some noise.

So does direction offer ETFs targeting these particular industry groups? >> Spot on, Ron.

So we do offer end investors both a breadth in terms of our single stock offerings as well as across more diversified strategies or sectors or industries.

And that's really where our business began in 2007 and 2008.

And so you know you have spotlighted that so far this year the bulls have won out.

Uh and it's an open question in terms of if that will be the finishing order but we've seen interest from traders on both sides.

And so, you know, we look across our sector lineup and industries in particular.

Maybe there's a few I would highlight.

I think within healthcare, um, a few tickers to remember, cure and pill, um, for kind of expressing a view on either side of the health care industry as a whole or the sector.

And then if you look within it, we're seeing, you know, continued interest despite some of the challenges from a political standpoint towards biotech.

And so lab U and lab D, U indicating uh being a bull uh and uh D being bearish two considerations as well for the biotech sector.

And then it goes you know we hardress not to mention kind of two of our flagship strategies which are tech L and tech S on technology.

And so for those looking to uh you know take a decision on either side of the technology sector or within that you know very clearly the thing that's kind of continuing to drive our global economy and particularly in the US semiconductors and so and so are areas of continued interest from our trading community and then stepping kind of completely outside what I would note is maybe something even like homebuilders and so as we're thinking about a change in interest rates and mortgage rates seem to have come down more recently.

Uh home builders may be benefiting from that.

There's inventory questions that still linger in in the housing market, but something like nail is a consideration for an active trader who's looking to express a view on the bullish side of of home building.

And so you know again what one can expect when they come to direction is a number of opportunities whether it's for concentrated exposure say in single stock where you're really looking to play news sentiment earnings that are out there on an individual company to more diversified baskets where you have an opportunity to express a view towards any given sector or industry.

So, uh, we're excited to to bring more to market later this year, and I look forward to a conversation to discuss those. >> Good stuff.

Well, thank you, Mo, for taking the time and for your excellent insights.

We'll see you soon. >> Thanks, Ron. >> Be sure to visit direction.com to learn more about direction's ETF lineup.

Get news updates along with education for traders.

I'm Ronda Ley.

Thanks for watching.

Don't forget to hit the subscribe button and we'll see you next time.