Top Leveraged ETFs Right Now

Depending on the type of trader you are, the stock market can offer you a variety of trading options to accommodate your financial goals. If your investment strategy involves high-stakes trading, you can consider putting your money into leveraged ETFs.
Leveraged ETFs are specially designed securities for speculative traders having a high-risk profile. These ETFs use borrowed money or derivatives such as options and futures to amplify the returns from underlying indices by up to 200% (2:1 ratio) or 300% (3:1 ratio).
For example, the ProShares Ultra S&P 500 (NASDAQ: SSO) ETF tracks the S&P 500 Index at 200% (2:1 ratio). If you bought a single share of ProShares Ultra S&P 500 ETF at $100 and the underlying S&P 500 index rose by $1 (1%), you would get a return of $2 (2%) and your total asset value would be $102.

On the other hand, if the S&P 500 Index fell by $2 (2%), you would lose $4 (2%) and your total asset value would be $96. The value of leveraged ETFs gets reset every day at the end of the trading session.

Leveraged ETFs Biggest Gainers and Losers

Here are the latest stock quotes of leveraged ETFs to help you stay on top of the biggest gainers and the worst losers on the stock exchange.

Premarket Leveraged ETFs

You can improve your price predictions of leveraged ETFs before the stock exchange opens with these live updates.

Aftermarket Leveraged ETFs

Here are the most recent price updates on leveraged ETFs to help you trade after the stock exchange is closed.

Why Invest in Leveraged ETFs?

Here are the top 3 reasons you should consider investing in leveraged ETFs.

1. Leveraged ETFs Can Outperform Benchmark Indices

Indexes can give investors considerable gains during bullish markets. While these gains can help investors achieve their financial goals, leveraged ETFs can amplify total returns. Leveraged ETFs can achieve double or triple the returns of market indices depending on the amount of leverage you use.

Based on your market predictions, you can choose leveraged ETFs with return ratios that maximize your profits. There are over 200 leveraged ETFs with underlying assets in bonds, commodities, currencies, equities and real estate for you to invest in.

2. Leveraged ETFs Are Better for Short-Term Investments

You can earn big profits in a short time by investing in leveraged ETFs. Market fluctuations are rampant throughout trading sessions and leveraged ETFs can help you take advantage of daily stock price swings. Volatile market conditions can create exciting investment opportunities for you in this ETF sector.

Leveraged ETFs are reset every day to rebalance their leverage. While the magnified return rates can yield higher profits from a single trade, buying and holding onto leveraged ETFs can increase the chances of undergoing exponential losses.

3. Investing in Leveraged ETFs Costs Less Capital

Leveraged ETFs let you achieve your financial goals with less capital. Let's say your financial goal is to buy a new car that costs $25,000. You could invest in a regular ETF such as Vanguard S&P 500 ETF (NASDAQ: VOO) that tracks the S&P 500 Index. The price of 100 shares of Vanguard S&P 500 ETF at $225 per share would cost you a total of $22,500. When the S&P 500 Index goes up by 11.2%, you can sell all your shares and cash in for a new car.

Consider the same scenario with a leveraged ETF such as ProShares Ultra S&P 500 that tracks the same index but at a 200% return rate. It would have cost you just half of your capital at $11,250 with a return rate of 222.4% to buy that new car.

Top 3 Leveraged ETFs by AUM

With leveraged ETFs, you cannot lose more money than you put in. Leveraged ETFs are more suited for daily trades rather than long-term investments. The compounding expenses involved in holding leveraged ETFs such as interest rates, premiums, trade fees and investment management fees can pile up over time and swallow a good chunk of your returns.

Do your research on the index performance, expense ratios, daily trade volumes, investment management fees, historical returns record and the total assets under management (AUM) before investing in leveraged ETFs.

Take a look at these leveraged ETFs to get a head start on your trading strategy.

1. Direxion Daily Junior Gold Miners Index Bull 3x Shares (NASDAQ: JNUG)

Direxion Daily Junior Gold Miners Index Bull 2x Shares tracks the MVIS Global Junior Gold Miners Index. It holds assets in domestic and foreign penny stocks, small-cap stocks and mid-cap companies that generate at least 50% of their revenue from gold or silver mining.

Direxion Daily Junior Gold Miners Index Bull 2x Shares has a high expense ratio of 1.15%. The fund distributes quarterly dividends to its investors and invests heavily in Canadian companies.

2. ProShares Ultra Basic Materials (NASDAQ: UYM) 

ProShares Ultra Basic Materials corresponds to a 200% return on the daily performance of the Dow Jones U.S. Basic Materials Index. It offers exposure to broad-based, multi-cap companies from the materials industry.

ProShares Ultra Basic Materials has a high expense ratio of 0.95%. It has a total AUM of $34 million. Shares have generated an annualized 16% return over the past three years. 68% of the fund's assets are in the chemicals sector.

3. Direxion Daily India Bull 3x Shares (NASDAQ: INDL)

Direxion Daily India Bull 2x Shares mirror the MSCI India Index at a 200% return. It covers 85% of companies in the Indian equity universe.

Direxion Daily India Bull 2x Shares has a high expense ratio of 1.26%. The fund's top three industries are Financials (27%), Information Technology (13%), and Consumer Discretionary (11%).

Best Online Brokers for Leveraged ETFs

An online broker lets you find and trade the top ETFs at your convenience. Benzinga has curated the best online brokers to help you build your wealth and financial portfolio.

Amplify Your Returns

Your investments in leveraged ETFs can rake in exponential profits, provided that your market predictions are right. These ETFs give you a chance to boost your returns by 2 or 3 times in 1 single day, but because of the nature of trading, you could lose your money at the same time. Leveraged ETFs give investors more opportunities but it is important to consider your risk tolerance and financial goals before getting started.

Frequently Asked Questions