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leverage-decayWith all the criticism about leveraged ETFs, not much has been said about how much of a great investment tool they are. Many day traders have relied on margin for decades to gain leverage through their daily trades. Using margin with your brokerage account can become very costly and not to mention there are many account limitations within them. Leveraged ETFs provide a low cost product to day traders with the ability to capture massive daily gains.

Direxion the leader in 3X leveraged products has several ETFs that day traders use. The most popular ones are the Direxion Daily Financial Bull 3X Shares (FAS) and the Direxion Daily Financial Bear 3X Shares (FAZ) which have been at the center of attention with the financial crisis. Most of the 3X leveraged funds are very liquid and provide for easy trading.

The most important point when it comes to investing in leveraged funds is that they are NOT for a buy-and-hold strategy. Leveraged ETFs are designed to reflect the underlying asset moves on a daily basis and should not be used unless understood. These ETFs are a great tool but, can be devastating for a trader who does not use them properly.

Here is a list of Direxion’s leveraged products for the day trader below:

Daily 3X Bull ETFs:
(BGU) Daily Large Cap Bull 3x Shares Russell 1000 300%
(MWJ) Daily Mid Cap Bull 3x Shares Russell Midcap Index 300%
(TNA) Daily Small Cap Bull 3x Shares Russell 2000 300%
(ERX) Daily Energy Bull 3x Shares Russell 1000 Energy 300%
(FAS) Daily Financial Bull 3x Shares Russell 1000 Financial Services 300%
(DRN) Daily Real Estate Bull 3x Shares MSCI US REIT Index 300%
(TYH) Daily Technology Bull 3X Shares Russell 1000 Technology Index 300%
(DZK) Daily Developed Markets Bull 3X Shares MSCI EAFE Index 300%
(EDC) Daily Emerging Markets Bull 3X Shares MSCI Emerging Markets Index 300%
(TYD) Daily 10-Year Treasury Bull 3x Shares NYSE Arca Current 10-Year U.S. Treasury Index 300%
(TMF) Daily 30-Year Treasury Bull 3x Shares NYSE Arca Current 30-Year U.S. Treasury Index 300%

Daily 3X Bear ETFs
(BGZ) Daily Large Cap Bear 3x Shares Russell 1000 -300%
(MWN) Daily Mid Cap Bear 3x Shares Russell Midcap Index -300%
(TZA) Daily Small Cap Bear 3x Shares Russell 2000 -300%
(ERY) Daily Energy Bear 3x Shares Russell 1000 Energy -300%
(FAZ) Daily Financial Bear 3x Shares Russell 1000 Financial Services -300%
(DRV) Daily Real Estate Bear 3x Shares MSCI US REIT Index -300%
(TYP) Daily Technology Bear 3X Shares Russell 1000 Technology Index -300%
(DPK) Daily Developed Markets Bear 3X Shares MSCI EAFE Index -300%
(EDZ) Daily Emerging Markets Bear 3x Shares MSCI Emerging Markets Index -300%
(TYO) Daily 10-Year Treasury Bear 3x Shares NYSE Arca Current 10-Year U.S. Treasury Index -300%
(TMV) Daily 30-Year Treasury Bear 3x Shares NYSE Arca Current 30-Year U.S. Treasury Index -300%

Disclosure: No Positions

Source: Leveraged ETFs Have Become a Day Trader's Dream Come True