SOXS May Pay a 20% Dividend, But It Lost 87% Betting Against Nvidia | SOXS NVDA Pays a 20% Dividend, But lost 87% ofBet Against NVIDIA, and Lost 87%
Direxion Daily Semiconductor Bear 3x Shares (NYSEARCA:SOXS) offers a contrarian bet against the AI boom, delivering three times the inverse daily performance of semiconductor stocks.
SOXS: Making Money By Shorting Bad Products
Direxion Daily Semiconductor Bear 3X Shares ETF is a poor long-term investment due to its inverse nature and volatility drag. Shorting SOXS can yield market-beating returns, but requires careful risk management, including cash reserves and strategies like the Kelly Criterion. To mitigate risks, consider using put options or predefined stop-loss levels to protect against significant drawdowns in semiconductor stocks.
SOXS: Amortizing Fund That Should Be Avoided (Rating Upgrade)
Despite a 6% pullback in semiconductor stocks, the SOXS ETF has lost 6%, highlighting its ineffectiveness as a hedge due to volatility decay. SOXS ETF's reset of daily exposure leads to significant long-term losses, with a -70.9% CAGR over 10 years, making it an abysmal investment. Investors should consider put options on individual overvalued stocks or sector ETFs like SOXX for defined risk and reward, avoiding SOXS's open-ended decay.
SOXS: Pullback Or Bubble? Doesn't Matter, Continue To Avoid This Amortizing Trap
The Direxion Daily Semiconductor Bear 3X Shares ETF provides -300% exposure to the daily return of the NYSE Semiconductor Index. Former President Trump's comments regarding Taiwan caused semiconductor stocks to plunge and the SOXS ETF to gain 21% on July 17th. Even if this is the bursting of the AI semiconductor bubble, traders should be wary of holding the SOXS for too long due to extreme volatility decay.
SOXS ETF: Another expensive way to go broke
The Direxion Daily Semiconductor Bear 3x Shares (SOXS) ETF has become one of the most expensive ways to lose money in Wall Street. The fund has an expense ratio of a whopping 1.03% and has constantly been in the red.
