SOXL ETF

Leveraged ETFs like SOXL offer high volatility, making them suitable for DIY option monetization to generate income and capitalize on AI trends. SOXL's 30-Day IV of 70-80 and active options market provide opportunities for significant weekly and monthly yields through strategic call selling. DIY option income strategies, including selling PUTs and using protective PUTs, can enhance safety and establish capital buffers.

The Direxion Daily Semiconductor Bull 3X Shares ETF is a 3x leveraged ETF that produced nearly a 400% return from late October 2023 through July 2024. SOXL shares are highly volatile, with shareholder value getting cut roughly in half since the July top. The semiconductors currently have a rough technical setup, high valuations, and insiders have been selling.

Semiconductor stocks are volatile but appear poised for a year-end rally; patience should be rewarded with lower prices before the upswing. I prefer the Direxion Daily Semiconductor Bull 3X Shares ETF, or SOXL, for leveraged exposure, though it carries significant risks and requires prudent position sizing. Technical analysis of the underlying iShares Semiconductor ETF, or SOXX, shows a downtrend, but bullish indicators suggest a bottom is near, setting up for a rally.

I have warned readers since April about the risks of owning Direxion Daily Semiconductor Bull 3x Shares ETF, a highly leveraged Big Tech play. SOXL has dropped -25% since my original article, and the technical chart suggests a repeat of the 2022 bust. The daily rebalancing feature and high holding costs make long-term gains unlikely, with the strong potential for another -50% to -80% loss.

SOXL shares doubled in value from mid-April to mid-June, prompting my cautionary article on the ETF. My timing was fortuitous, as SOXL are down ~52% since then. However, my leveraged alternatives have performed worse, leaving SOXL investors something to be grateful for. If semiconductor stocks continue to trend in one direction for several weeks at a time, SOXL could potentially outperform its target 3x factor.

SOXL is a leveraged ETF offering high-risk, high-reward exposure to the semiconductor market, magnifying short-term trends and volatility. Recent events surrounding the Yen carry trade have led to massive unwinding, causing losses for investors and spiking market volatility. SOXL remains a strong sell due to the risks associated with the Yen carry trade unwinding and the potential for accelerated decay in volatile markets.

Direxion today launched an ETF that offers leveraged exposure to companies operating in the nuclear energy industry. The Direxion Daily Uranium Industry Bull 2X Shares (NYSE Arca: URAA) aims to provide twice the daily performance of the Solactive United States Uranium and Nuclear Energy ETF Select Index.

The Direxion Daily Semiconductor Bull ETF (SOXL) has done well in the past decade as it outperformed most popular funds like those tracking the Nasdaq 100 and S&P 500 indices. It has soared by over 564% in the past five years while the Invesco QQQ (QQQ) and the SPDR S&P 500 (SPY) ETFs.

I see mixed risks in the chip industry heading into the second half. Bullish news hit the tape on Tuesday as Bank of America added Micron to their US 1 list, boosting semiconductor stocks like NVIDIA. Semiconductor ETFs have reasonable valuations with strong EPS growth, but caution is advised due to momentum and technicals.