fbpx
QQQ
+ 0.00
323.77
+ 0%
DIA
+ 0.00
311.77
+ 0%
SPY
+ 0.00
383.80
+ 0%
TLT
+ 0.00
152.46
+ 0%
GLD
+ 0.00
175.37
+ 0%

2 Leveraged ETFs To Trade The January Effect With

by
December 20, 2017 6:31 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
2 Leveraged ETFs To Trade The January Effect With

Fans of seasonal trading and investing no doubt know about the “January Effect.” This is the notion that stocks will rise in January, therefore setting the course for a bullish new year. 

 

In recent years, there has been some evidence of the January Effect starting in December. Other, longer-ranging data points suggest the January Effect is more impactful for small-caps than large-caps. In fact, the Russell 2000 Index outperformed the Russell 1000 Index in the first month of the year over the three decades spanning 1972 to 2002.

 

This presents a potential trading opportunity in the Direxion Daily Small Cap Bull 3X Shares (NYSE:TNA). TNA attempts to deliver triple the daily returns of the Russell 2000 Index.

 

Leveraged Lessons

 

By nature, small-caps are volatile, underscoring the point that a leveraged small-cap ETF is bound to be significantly more volatile than a standard small-cap fund.

 

“Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage,” according to Direxion. “They seek daily goals and should not be expected to track the underlying index over periods longer than one day."

 

TNA has a bearish cousin. The Direxion Daily Small Cap Bear 3X Shares (NYSE:TZA) attempts to deliver triple the daily inverse returns of the Russell 2000 Index.

 

January Preparation

 

Data suggests that traders are already preparing for the January Effect in a big way with TNA while ditching the bearish TZA.

 

Over the past month, TNA is averaging daily inflows of $3.1 million while TZA is suffering daily outflows $3.5 million, according to issuer data. 

 

Related Links:

 

Investors Return To This Staples ETF. 

 

Loving Leveraged Tech ETFs. 


Related Articles

Santa Claus Rally, January Effect Put This Leveraged Small-Cap ETF On Early 2021 Shopping List

With just a few trading days left in 2020, it's fair to say investors are hearing plenty about the strength of small-cap stocks to close out the year. read more

Small Caps Are Getting Exciting, But These ETFs Are Exhilarating

Small-cap stocks are on scintillating paces as of late with the benchmark Russell 2000 Index higher by 11.25% over the past month. Last week, the index hit a record high for the first time since 2018. read more

Heading Into The Election, Traders Are Still Betting On Tech

If the first three quarters of 2020 have been any indication, the final three months of the year will more than likely hold its fair share of surprises. That being said, trends among Direxion’s most popular leveraged funds reveal how traders are positioning themselves heading into election season. read more

A Leveraged Small-Cap ETF On An Epic Run

The Direxion Daily Small Cap Bull 3X Shares (NYSE: TNA) is in the midst of a stellar run. With the Russell 2000 Index on a six-day winning streak, TNA is higher by 44.10% over the past week and nearly 50% this month. read more