What does Direxion Daily S&P Biotech Bear 3X Shares do?

Direxion Daily S&P Biotech Bear 3X Shares (NYSE:LABD) is an exchange-traded fund (ETF) that aims to achieve daily investment results, before fees and expenses, of 300% of the inverse of the performance of the S&P Biotechnology Select Industry Index. This ETF is designed for investors looking to leverage or hedge against the biotech sector's performance, magnifying the inverse of the index's daily performance. The primary objective is to provide traders with the tools to capitalize on downward movements in the biotechnology sector, making it suitable for those with a bearish outlook on biotech stocks. Operating solely on the NYSE Arca, LABD caters to investors seeking aggressive investment strategies, emphasizing short-term trades rather than long-term holdings.
Direxion Daily S&P Biotech Bear 3X Shares company media

Company Snapshot

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Ownership

Public
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Employees

56
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Sector

ETF
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Head Office

New York, United States
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Year Founded

2015

What does Direxion Daily S&P Biotech Bear 3X Shares specialise in?

/Leveraged ETF /Short Position /Biotechnology Sector /Daily Rebalance /Bear Market /Investment Trading

What are the products and/or services of Direxion Daily S&P Biotech Bear 3X Shares?

Overview of Direxion Daily S&P Biotech Bear 3X Shares offerings
Targets Inverse Daily Return of S&P Biotechnology Select Industry Index (3x Leveraged): LABD aims to deliver returns that are -3 times (3x leveraged) the inverse performance of the S&P Biotechnology Select Industry Index. This means if the index goes down 1%, LABD seeks to go up 3%, and vice versa.
Seeks to Capitalize on Bearish Markets: LABD benefits when the S&P Biotechnology Select Industry Index, and the companies within it, are declining in price. The 3x leverage amplifies those downward movements.
Short-Term Investment Focus: Due to the compounding effect of leverage, LABD is designed for short-term trading and may not be suitable for long-term investors.
High Risk Profile: Due to the leveraged nature, LABD is considered a high-risk investment compared to traditional ETFs or stocks. Investors should be aware of the potential for significant capital loss, even if the biotechnology sector experiences a moderate decline.
Potential for Magnified Gains: While LABD targets magnified returns in a declining biotech market, it can also amplify gains if the market rebounds slightly.
Volatility Decay Over Time: The daily reset mechanism of the leverage can cause LABD's performance to deviate from its target return over extended periods, especially in volatile markets.