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LABD Fund Description
The Direxion Daily S&P Biotech Bear -3x Shares ETF provides daily 3 times exposure to the S&P Biotechnology Select Industry Index.
LABD FactSet Analytics Insight
LABD is a daily leveraged inverse (-3x) bet on the S&P Biotechnology Select Industry Index, an index tracked in unleveraged form by iShares’ wildly popular IBB. LABU does this through a portfolio of derivatives contracts that gets rebalanced at the end of each trading day. Because of that, the fund’s return for periods longer than a day becomes path dependent, and is likely to be different from -3x the return of the index for the same period. This makes LABU suitable primarily for short-term traders.
LABD is the first challenger in the Inverse Leveraged US Biotech segment to the long-established BIS from ProShares. What LABU brings to the table that isn’t already offered by BIS is most apparent in the leverage factor: LABU pushes its returns to 3 times the inverse of the exposure of its index, whereas BIS has only a factor of 2. The expense ratio has minimal impact on the cost of holding these funds for a short period of time, and would matter little to someone who is speculating on the short-term movements of biotech companies. Trading costs as reflected in spreads, and potential premium/discounts are the predominant consideration here. Stayed tuned to see if LABU manages to gather assets and establish itself.
LABD FactSet Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of LABD. LABD is rated a N/A out of 5.