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Duration: 2:18

Contributor: Direxion

Level: Intermediate

This Lesson is meant to help you understand if Direxion Shares are right for you.

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Study Notes:

You’ve probably heard a lot recently about exchange-traded funds or ETFs, which resemble mutual funds in structure but can be traded throughout the day like stocks.

Well, Direxion shares are leveraged ETFs, powerful daily trading tools that are designed to help increase exposure and stay agile in rapidly changing markets.

Jack is a conservative investor with a buy and hold approach and Jill is an investment professional and active trader who is willing to take on more risk. We’ll get into the details in the next section, but first allow us to explain some important information about the funds.

These are not your average ETFs.

Direxion shares and other leveraged ETFs are specifically designed for sophisticated investors who; A understand the risks associated with the use of leverage; B understand the consequences of seeking daily leveraged investment results; and C intend to actively monitor their investments.

Direxion shares are not intended for conservative investors who; A cannot tolerate substantial short-term losses; B are unfamiliar with a unique nature and performance characteristics of funds that seek leveraged daily investment results; and C are long-term investors who do not monitor their portfolios frequently.

Carefully consider the investment objectives, risks charges and expenses of Direxion shares before investing. The prospectus and summary prospectus contain this and other information and can be obtained by visiting www.direxioninvestments.com.

Investing involves risk, including the possible loss of principal. The use of derivatives, such as futures contracts, forward contracts, options and swaps are subject to market risks that may cause their price to fluctuate over time.

The funds do not attempt to, and should not be expected to, provide returns, which are a multiple of the return of the index for periods other than a single day.

For specific risks including leverage, compounding, volatility and exchange-traded funds, please read the prospectus. To learn more about Direxion’s leveraged ETFs please visit Direxioninvestments.com.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Academy that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Academy are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Direxion and is being posted with permission from Direxion. The views expressed in this material are solely those of the author and/or Direxion and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Stock Symbols

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Leverage ETFs

Complex or Leveraged Exchange-Traded Products are complicated instruments that should only be used by sophisticated investors who fully understand the terms, investment strategy, and risks associated with the products.  Learn more about the risks here: https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=4155

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