Tap Oil With These Leveraged Energy ETFs

After registering the worst month in a decade, oil price rebounded strongly gaining as much as 6% in yesterday’s trading session following the G20 summit, which has been highly positive for the commodity. Notably, oil notched its best day in more than five months.

This is especially true as trade concerns alleviated for some time with the U.S.-China trade truce, in which Trump agreed to halt any new tariff for 90-days while China agreed to boost purchases of U.S. agricultural goods to reduce trade imbalance between the two countries. This has brought relief to global growth concerns and the resultant waning oil demand.

Also at the meeting, Russia and Saudi Arabia agreed to extend their agreement to curb output to help boost oil price. This has raised hopes for fresh cuts in oil supply when OPEC meets in Vienna on Dec 6. Further, the surprise move by the Canadian province of Alberta to force producers to cut output by 8.7%, or 325,000 barrels per day, starting next month added to the strength.

The combination of all these factors has increased the appeal for oil at least in the near term, fueling a rally in the energy space.

How to Play?

Amid the renewed optimism, many investors have turned bullish on the energy sector and are seeking to tap this opportunity. For them, a leveraged play on energy or oil could be an excellent idea as these could see huge gains in a very short time frame when compared to the simple products.

Below we have highlighted several leveraged ETFs and the key differences between them:

ProShares Ultra Oil & Gas ETF (DIG - Free Report)

This ETF seeks to deliver twice (2x or 200%) the daily performance of the Dow Jones U.S. Oil & Gas Index. It has been able to manage $92.4 million in its asset base and trades in a good volume of about 88,000 shares per day on average. DIG charges 95 bps in fees per year and gained 4.7% in yesterday’s trading session.

Direxion Daily Energy Bull & 3x Shares (ERX - Free Report)

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