What is FAS and FAZ?
The Direxion Daily Financial Bull (FAS) and Bear (FAZ) 3X Shares seek daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the Russell 1000® Financial Services Index. There is no guarantee the funds will meet their stated investment objective.
What does ETF decay mean?
In terms of leveraged ETFs, decay is the loss of performance attributed to the multiplying effect on returns of the underlying index of the leveraged ETFs. In the example, the decay took $1 or 10% off the performance of the leveraged ETF.
What is FAZ based?
FAZ provides 3x inverse leverage exposure to the Russell 100 Financial Services Index—a subset consisting of large-cap financial companies from the Russell 1000 Index.
Do all leveraged ETFs decay?
The answer is a resounding NO. Leveraged ETFs are designed for short-term trading. Due to a phenomenon called volatility decay, holding a leveraged ETF long-term can be very dangerous.
What is the difference between SPXL and Upro?
The price of owning shares with SPXL is lower than UPRO by almost one percent. While both SPXL and UPRO have a reasonable volume, UPRO does trade nearly 10 percent more shares per day on average than that of Direxion Daily S&P 500 Bull 3x Shares [NYSEArca: SPXL].
What is beta slippage?
Beta slippage is a multi-day tracking inefficiency found in leveraged funds. Due to rebalancing, the daily leveraged fund does not track true to its underlying index over a multi-day period. This structural tracking inefficiency caused by the leveraged funds need to rebalance is defined as beta slippage.
What is decay in stock market?
Time decay is the reduction in the value of an option as the time to the expiration date approaches. The time value declines or time decay accelerates as the expiration date gets closer because there’s less time for an investor to earn a profit from the option.
What is FAS track index?
FAS Factset Analytics Insight FAS provides 3x leveraged exposure to the Russell 100 Financial Services Index—a subset consisting of large-cap financial companies from the Russell 1000 Index.
Are leveraged ETFs bad long term?
Leveraged ETF does not provide you with long term leverage but “rolling” short term leverage, so it works for short term accelerated returns (up and down) but not long term. If you want long term leverage, go to a broker that offers cheap margin loans (eg Interactive Brokers) and buy S&P 500 or whatever ETF on margin.