2024-01-26 03:26:38 ET
Summary
- The Direxion Daily 20+ Year Treasury Bear 3X Shares ETF is a leveraged ETF that takes a 3x leveraged position against high-duration Treasuries.
- Leveraged ETFs have unintuitive behavior and value erosion due to daily resetting, making them risky, speculative and peculiar, although more appropriate in short bursts.
- There is a case for downside to long-duration Treasuries and that next week's data releases and Fed comments may provide catalysts for TMV to rise.
- However, the combination of both the 3x leverage factor and the high duration sensitivity has us steering clear nonetheless, even if we think the case leans bullish for TMV.
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For further details see:
TMV: FOMC Conference Next Week, A Key Potential Catalyst