Direxion Daily AMZN Bear 1X Shares (AMZD)AMZD

ETF Direxion Daily AMZN Bear 1X Shares Overview

Profile

Direxion Daily AMZN Bear 1X Shares (AMZNBEAR) is an exchange-traded fund (ETF) designed to provide short-term daily inverse exposure to the price movement of Amazon.com Inc. (AMZN) stock. It aims to achieve this by employing financial derivatives like swaps and futures contracts. In simpler terms, AMZNBEAR seeks to gain value when Amazon's stock price falls by 1% and lose value when it goes up by 1%. This ETF is meant for active traders with a high-risk tolerance, not long-term investors.

Objective

The primary goal of AMZNBEAR is to offer investors a way to profit from a decline in Amazon's stock price. It allows them to capitalize on bearish market sentiment without directly selling or shorting the actual stock. This strategy can be used for hedging purposes or speculating on short-term market movements.

Issuer

Direxion Investments is the issuer of AMZNBEAR. It is a leading provider of leveraged and inverse ETFs, with over 270 ETFs under their belt.

Reputation and Reliability:

Direxion has a mixed reputation within the investment community. They have been praised for their innovative ETF offerings, but also criticized for their complex products and the high risks they entail.

Management:

The Direxion team consists of experienced investment professionals with expertise in derivatives trading and portfolio management. Their website provides a detailed management team profile.

Market Share

AMZNBEAR is a relatively small ETF in the broader levered/inverse ETF market. Its exact market share is difficult to pinpoint, as data sources vary. However, it likely represents a fraction of a percent within the overall sector.

Total Net Assets

As of November 24, 2023, AMZNBEAR has total net assets of $20.9 million. This signifies a relatively small size compared to larger, more established ETFs.

Moat

AMZNBEAR's competitive advantages include its:

• Unique Strategy: Direct exposure to short-term inverse movements of a specific stock like Amazon.
• Experienced Management: Team with expertise in derivatives and managing complex strategies.
• Liquidity: Offering reasonable trading volume for an ETF of its size.

Financial Performance

Historical Performance: AMZNBEAR has a short track record, making it difficult to assess its long-term performance. However, its performance heavily depends on Amazon's stock price movements.

Benchmark Comparison: AMZNBEAR seeks to deliver inverse performance compared to the price movement of AMZN stock. Its effectiveness can be gauged by comparing its returns to the negative returns of its benchmark.

Growth Trajectory: Given its short history and dependence on Amazon's price fluctuations, it's challenging to predict AMZNBEAR's growth trajectory with certainty.

Liquidity

Average Trading Volume: AMZNBEAR has an average daily trading volume of 9,129 shares, indicating moderate liquidity for its size.

Bid-Ask Spread: As of November 24, 2023, AMZNBEAR has a bid-ask spread of 0.04%. This signifies a relatively low cost associated with buying and selling the ETF.

Market Dynamics

Factors affecting AMZNBEAR include:

• Amazon's Stock Performance: The ETF's returns are directly tied to Amazon's stock movements.
• Interest Rates: Rising rates can increase the cost of borrowing necessary to maintain leveraged positions.
• Market Volatility: Increased volatility can amplify the ETF's gains and losses.

Competitors

Key competitors in the inverse AMZN ETF space include:

• ProShares Short Amazon ETF (AMZNQ)
• MicroSectors Inverse Amazon Daily ETF (URAR)

Market Share Comparison: It is difficult to get precise market share figures for each competitor, but AMZNQ appears to be the most significant competitor with a larger AUM compared to AMZNBEAR.

Expense Ratio

AMZNBEAR has an expense ratio of 0.95%, which includes management fees and other operating costs.

Investment Approach and Strategy

Strategy: Aims to provide daily inverse exposure to AMZN stock using derivatives. Composition: Primarily holds swaps and futures contracts tied to AMZN stock.

Key Points

• Inverse exposure: Seeks to benefit from declines in Amazon's stock price.
• Leveraged: Amplifies gains and losses compared to the underlying asset.
• Short-term: Designed for active trading, not long-term investing.

Risks

• Volatility: High potential for significant fluctuations in value.
• Market Risk: Tracking error and potential deviation from intended inverse performance.
• Counterparty Risk: Relying on derivatives contracts exposes the ETF to the risk of counterparty default.
• Short-Selling Risk: Potential for unlimited losses if Amazon's stock price rises sharply.

Who Should Consider Investing

• Active traders: Experienced investors comfortable with short-term, high-risk strategies.
• Hedgers: Investors seeking to protect against potential downside risk in their AMZN holdings.
• Speculators: Those aiming to capitalize on anticipated declines in Amazon's stock price.

Fundamental Rating Based on AI: 6/10

AMZNBEAR presents a moderately attractive investment option for specific investor profiles. Its unique strategy offers potential for short-term gains but comes with substantial risks. Investors should carefully consider their risk tolerance and investment goals before deciding on AMZNBEAR.

Resources and Disclaimers

• Data sources: Direxion website, ETF.com, Bloomberg Terminal
• Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Consult with a professional financial advisor before making investment decisions.