As Treasury yields continue to fluctuate amid the volatility that’s been tied to inflation fears, traders can benefit from the market movements whether yields are up or down with Direxion Investments’ leveraged exchange traded products.
“This is all about concern about a recession. The inflation numbers we got this morning were not good, worse than expectations … There’s high food prices and increasing concern inflation numbers are going to be sticky on the high side,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, in a Reuters report.
For more bearishness in the bond markets as a result of rising yields, traders can look to the Direxion Daily 20+ Yr Trsy Bear 3X ETF (TMV ). TMV seeks daily investment results equal to 300% of the inverse of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index.
TMV invests in swap agreements, futures contracts, short positions, or other financial instruments that provide inverse or short leveraged exposure to the index, which is a market value-weighted index that includes publicly issued U.S. Treasury debt securities that have a remaining maturity of greater than 20 years.
“This ETF offers 3x short leveraged exposure to the broad-based NYSE 20 Year Plus Treasury Bond Index, making it a powerful tool for investors with a bearish short-term outlook for U.S. 30 year treasuries,” an ETF Database analysis details. “An investment in leveraged debt can be a very risky one, as there are numerous factors that can converge to drastically change the returns of these products.”
As such, novice investors might want to stay away. However, for the seasoned investor, TMV could serve as an ideal inflation hedge as rates continue to rise and push bond prices lower.
Profiting From a Reversal
What goes up must eventually come down and vice versa. If a trend reversal occurs and bond prices push higher, traders can use the Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF ).
TMF seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. The index is a market value-weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years.
TMF, and other leveraged products from Direxion Investments, give investors the ability to:
- Magnify short-term perspective with daily 3X leverage.
- Go where there’s opportunity, with bull and bear funds for both sides of the trade.
- Stay agile with liquidity to trade through rapidly changing markets.
For more news, information, and strategy, visit the Leveraged & Inverse Channel.