Leveraged Bets Dominate Trading in Tariff Rout Like Never Before
The Direxion Daily Semiconductors Bull 3x Shares (ticker SOXL) saw a $1.74 billion inflow during the five-day stretch ending Friday, a span during which it plunged about 46%.
Photographer: SeongJoon Cho/BloombergLate last week, as stocks across the globe lurched lower in the wake of US President Donald Trump’s tariff blitz, a striking pattern emerged in the $10 trillion US market for exchange-traded funds.
No fewer than eight of the 13 most-traded ETFs on Friday were funds that use options to offer juiced-up or inverse returns of various indexes or single stocks. In fact, the top four comprised a triple-leveraged bet on semiconductor stocks, an amped-up bullish wager on Tesla Inc., a vehicle promising three times the performance of the Nasdaq 100, and the latter’s bearish sibling.