Direxion Shares ETF Trust - Direxion Daily TSLA Bear 1X Shares (TSLS)

Overview

The Direxion Daily TSLA Bear 1X Shares (TSLS) provides 1x inverse exposure to the daily performance of Tesla (TSLA) stock, offering investors a way to potentially profit from a decrease in Tesla's stock price. It is part of the leveraged and inverse ETF market.

Reputation and Reliability

Direxion is a well-known issuer of leveraged and inverse ETFs, with a history of providing various specialized investment products. However, their products are complex and require careful consideration.

Management Expertise

Direxion has a team of investment professionals with experience in managing leveraged and inverse ETFs, understanding the intricacies of daily rebalancing and its potential impact on returns.

Goal

To seek daily investment results, before fees and expenses, of 100% of the inverse (opposite) of the daily performance of Tesla (TSLA) stock.

Investment Approach and Strategy

Strategy: The ETF employs a daily rebalancing strategy to achieve its investment objective. This means the fund resets its exposure each day, making it suitable for short-term trading rather than long-term investment.

Composition The ETF primarily uses financial instruments like swaps and futures contracts to gain inverse exposure to Tesla's stock price. It does not directly hold Tesla shares.

Market Share: TSLS holds a small market share within the universe of inverse and leveraged ETFs, specifically those focused on single-stock exposure.

Total Net Assets (AUM): 65322430

Key Competitors

• AXS TSLA Bear Daily ETF (TSLQ)

Competitive Landscape

The competitive landscape consists of other inverse ETFs targeting Tesla, with TSLQ having a large portion of the market share. Advantages of TSLS would potentially include a lower expense ratio or a slightly different implementation strategy (although this has changed and now TSLQ has a lower expense ratio). Disadvantages include smaller AUM and volume compared to TSLQ, which could lead to larger spreads.

Historical Performance: Historical performance is highly dependent on Tesla's stock price movements. Due to the daily rebalancing, long-term performance can significantly deviate from the simple inverse of Tesla's returns.

Benchmark Comparison: The ETF's benchmark is the inverse of Tesla's daily performance. Tracking error can occur due to fees, expenses, and the daily rebalancing process.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume of TSLS indicates moderate liquidity, which is important for investors looking to enter and exit positions quickly.

Bid-Ask Spread

The bid-ask spread provides insights into the cost of trading TSLS, reflecting the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept.

Market Environment Factors

Economic indicators affecting the automotive industry, investor sentiment towards electric vehicles, and Tesla-specific news events influence the ETF's performance. General market volatility can also amplify the ETF's movements.

Growth Trajectory

The growth trajectory of TSLS is tied to the demand for inverse Tesla exposure. Increased volatility in Tesla's stock and bearish sentiment toward the company could increase demand for the ETF.

Competitive Edge

TSLS offers a straightforward way for investors to bet against Tesla's daily performance with 1x leverage. Its primary advantage lies in providing a targeted and accessible instrument for short-term bearish trading strategies on TSLA. However, as a daily reset ETF it is not designed for long-term holding. TSLQ is a competitor that provides similar exposure with a large market share.

Volatility

TSLS is highly volatile due to its inverse leverage and the inherent volatility of Tesla's stock. Daily rebalancing can lead to significant deviations from the inverse of Tesla's cumulative returns over longer periods.

Market Risk

The ETF is subject to market risk associated with Tesla, including company-specific news, industry trends, and overall market conditions. Additionally, the use of leverage amplifies both potential gains and losses.

Ideal Investor Profile

The ideal investor for TSLS is an experienced trader with a short-term outlook who understands the risks associated with leveraged and inverse ETFs and has a bearish view on Tesla's stock.

Market Risk

TSLS is best suited for active traders seeking short-term tactical opportunities rather than long-term investors. It is not appropriate for passive index followers or those with a low-risk tolerance.

The Direxion Daily TSLA Bear 1X Shares (TSLS) provides a tool for investors to profit from short-term declines in Tesla's stock price. The ETF is designed for active traders who understand the risks associated with leveraged and inverse products. Daily rebalancing resets the exposure, making it unsuitable for long-term holding. The ETF is most volatile and risky.

Data Sources:

• Direxion
• Yahoo Finance
• ETF.com

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investing in leveraged and inverse ETFs involves significant risks, including the potential loss of principal. Investors should carefully consider their investment objectives and risk tolerance before investing.