Triple Your Return on a Market Plunge

By Sam Collins,

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Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ ) - This exchange-traded fund (ETF) seeks daily investment results of 300% of the inverse of price performance of the Russell 1000 index. The fund normally creates short positions by investing at least 80% of net assets in financial instruments that, in combination, provide leveraged and unleveraged exposure to the index.

With chart formations and moving average studies showing that the market is overbought, traders (and I do mean traders and not investors) may want to buy BGZ at $35.50 or lower with close stops. If the indices reverse from current high levels, this triple leveraged ETF could quickly run first to $38, and perhaps even to $40.

Please remember that leveraged and inverse ETFs entail unique risks, including but not limited to: use of leverage, aggressive and complex investment techniques, and the use of derivatives. Also, inverse ETFs seek to deliver the opposite of the performance of a benchmark; however, returns over longer periods will likely differ in amount and even direction. These products require active, daily monitoring and management, and are not suitable for all investors.

The Trade of the Day is not a fee-based managed portfolio, so buyers of illustrated stocks must monitor their own buying and selling prices.

Trade of the Day - Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ) Chart

Trade of the Day Chart Key

If you have questions or comments for Sam Collins, please e-mail him at .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: BGZ , ETF

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