In the world of oil trading, volatility is a way of life. It’s also an ideal opportunity for traders to make a profit. Oil prices came under pressure today, hitting a new low not seen since 2021.
The fluctuation of oil prices is a reminder that traders don’t have to resort to oil futures to get in on the action. There are leveraged/inverse exchange-traded funds (ETFs), in particular from Direxion Investments, that traders can also use for plays on oil or the overall energy sector.
Don't Forget About Energy
Nvidia and Palantir are just a couple of names rising to prominence in market that’s been locked in on artificial intelligence (AI). As Direxion noted in an Xchange newsletter, the oil-gas and overall energy industry is still worthy of making traders’ watch lists.
“They may not have AI buzz or chip mania behind them, but oil and gas giants still move markets — and portfolios,” the newsletter said, adding that energy was the best-performing sector after the pandemic in back-to-back years (2021 and 2022).
There are some tailwinds that Direxion noted that could move the oil and gas sector higher. This includes vertical integration of Exxon/Chevron, strong dividends, profitable acquisitions, and overall global demand driven by emerging markets growth.
Exxon was one of the power players mentioned. With single-stock ETFs gaining more interest in 2025, investors could consider the Direxion Daily XOM Bull 2X Shares OMX. It’s an easy way for traders to add 2x exposure to their Exxon positions. For bearish days like today, when oil is under pressure, take the other side of the trade, with the Direxion Daily XOM Bear 1X Shares (XOMZ ).
Other leveraged ETFs to watch in oil and gas include the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH ). The fund doubles the exposure to the S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOPTR), which focuses on U.S. companies from the oil and gas exploration and production sub-industry. Bears can opt to trade the Direxion Daily S&P Oil & Gas Exploration & Production Br 3X ETF (DRIP ).
Trade the Entire Energy Sector
While Direxion has various ways for traders to ride any upside waves in the oil and gas industry, they also have ETFs for energy in general. One of their newest offerings is the Direxion Daily Energy Top 5 Bull 2X ETF (TEXU). The fund provides 200% of the performance of the S&P 500 Energy (Sector) Top 5 Equal Capped Index. As the index says, it gives traders exposure to the top five companies representing the energy sector.
“By focusing on the top five, Titan L&I ETFs allow traders to target the most influential companies in a sector, rather than diluting exposure across dozens of smaller names that may have less impact on price movements,” Direxion explained in a FAQ. In essence, the Titans ETF suite is ideal for traders looking for a median between single-stock ETFs and sector ETFs.
Speaking of which, for traders who would rather opt to trade the entire sector for added diversification and more leverage, there’s the Direxion Daily Energy Bull 3X Shares (ERX ). It tracks an index focused on U.S. companies within the energy sector: oil, gas and consumable fuels; and energy equipment and services. Energy bears can consider using the Direxion Daily Energy Bear 2X Shares (ERY ).
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