ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Leveraged & Inverse ETF Channel
  2. As Yields Rise, Lever Up on Falling Bond Prices
Leveraged & Inverse ETF Channel
Share

As Yields Rise, Lever Up on Falling Bond Prices

Ben HernandezSep 29, 2021
2021-09-29

Rising yields are roiling the stock market indexes with heavy volatility, but traders can counter the move with the Direxion Daily 7-10 Year Treasury Bear 3X Shares (TYO B).

According to a CNBC report, more volatility could be ahead for the stock market. Big tech in particular took the brunt of the blow with the Nasdaq Composite Index falling close to 3%, while the Dow Jones Industrial Average lost over 500 points in Tuesday’s trading session.

“A sharp jump in interest rates over the last several sessions stung the market, particularly the growth names,” the report said. “At its high Tuesday, the yield on the benchmark 10-year Treasury had climbed to 1.56%, about a quarter-percentage point move since the Federal Reserve meeting last Wednesday.”

“The S&P 500 ended the session down 2%, and the Nasdaq was off by 2.8% because of the large concentration of tech names in the index,” the report added. “Ten of the 11 S&P 500 sectors were down, with tech losing 2.9%. Energy was the only advancer, gaining 0.4%.”

Since bond prices and bond yields move inversely to one another, this sets up a play for TYO. It provides a hedging option against a trader’s existing positions in equities should they experience more weakness.

TYO seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the daily performance of the ICE U.S. Treasury 7-10 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 seven years and less than or equal to 10 years.

Direxion Daily 7-10

Playing Large-Cap Weakness

The rise in bond yields opens the doors for large-cap weakness. In particular, this sets up potential trades in the Direxion Daily Technology Bear 3X ETF (TECS B+) and the Direxion Daily S&P 500 Bear 3X ETF (SPXS B+).

“We’re seeing a gap down decline that is being driven by the mega caps broadly, which are down anywhere from 2% to 5% at this time,” said Fairlead Strategies founder Katie Stockton.

“Keep an eye on the momentum behind them,” said Stockton. “Just their sheer footprint alone creates an issue. When they do this, it affects sentiment. People relied on Google and Microsoft to never go down. Now, they’re getting a reality check.”

For more news and information, visit the Leveraged & Inverse Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X