5 Leveraged/Inverse ETFs Up More Than 15% In November

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The month of November proved to be volatile for the U.S. stock market given rising inflation, a surge in COVID-19 cases, and Fed’s taper talks. In fact, all the three major indices ended the month in red with the Dow Jones plunging the most by 3.7%.

However, strong corporate earnings, rising consumer confidence, new COVID-19 vaccines, and boosters continued to act as catalysts for the stock market. Amid the volatility, leveraged and inverse-leveraged ETFs gained increased popularity as these fetched outsized returns on the quick market turns in a short span.

Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report), Direxion Daily Cloud Computing Bear 2X Shares (CLDS - Free Report), MicroSectors U.S. Big Banks Index -3X Inverse Leveraged ETN (BNKD - Free Report), Direxion Daily S&P Biotech Bear 3x Shares (LABD - Free Report) and MicroSectors U.S. Big Oil Index -3X Inverse Leveraged ETN (NRGD - Free Report) gained more than 15% last month and might continue their strong performance if sentiments remain the same.

The new Covid variant, first detected in South Africa, is now spreading all over the world, causing travel restrictions as well as the potential lockdown measures. This has once again raised worries of the slowdown in global economic recovery. Additionally, Federal Reserve Chair Jerome Powell is planning to speed up the tapering of bond-buying at its December meeting to combat increasing price pressures.

Leveraged and Inverse-Leveraged ETFs

Leveraged and inverse-leveraged ETFs either create a leveraged long/short position, an inverse long/short position or a leveraged inverse long/short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time provided the trend remains a friend.

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