Direxion Daily Semiconductor Bull 3X Shares

The fund invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index. The index is a rules-based, modified float-adjusted market capitalization-weighted index that tracks the performance of the thirty largest U.S. listed semiconductor companies. The fund is non-diversified.

With the tailwinds blowing from artificial intelligence (AI), the semiconductor continues to witness expansive growth. This was further confirmed with a strong sales revenue showing in the third quarter.

Strong Q3 Revenues Confirm Semiconductor's Momentum

On Wednesday, Direxion expanded its fund lineup. They introduced two new pairs of single-stock Leveraged & Inverse ETFs.

New Direxion ETFs Focus On Palantir and Berkshire Hathaway

Leveraged ETFs are risky and unpredictable, and daily trading internals over the past 6 months have caused SOXL to return worse than it's target 3x factor to the underlying. Despite SOXL's impressive past gains, its recent 60% drop indicates impaired value that isn't likely to be recovered even if semiconductor stocks rebound. Alternatives to SOXL that I presented in mid-June have outperformed this leveraged ETF.

SOXL Is Down -55% Since I Suggested Alternatives; My Recommendation Doesn't Change

Nvidia has been a prominent centerpiece when it comes to getting semiconductor exposure on the back of the artificial intelligence (AI) theme. But it could see competition from another Magnificent Seven peer: Amazon.

Nvidia Could See Competition From Magnificent Seven Peer

Leveraged ETFs like SOXL offer high volatility, making them suitable for DIY option monetization to generate income and capitalize on AI trends. SOXL's 30-Day IV of 70-80 and active options market provide opportunities for significant weekly and monthly yields through strategic call selling. DIY option income strategies, including selling PUTs and using protective PUTs, can enhance safety and establish capital buffers.

Direxion Daily Semiconductor Bull 3X SharesSOXL

Direxion Daily Semiconductor Bull 3X Shares
SOXL