Leveraged ETFs: Turbo Charged Trading with a 3x Oil Stock ETF

When a double oil stock ETF is not enough, you can always move up to a triple leveraged oil stock ETF. At this point, you better know what you’re doing. While trading leveraged ETFs can be very rewarding, you need to understand the risks associated with using leverage. These 3x ETFs are not fit for long term buy and hold investors, they are the perfect tools to profit from short term volatility in oil prices by knowledgeable traders who actively monitor and manage their portfolios.

Direxion provides two 3x leveraged ETFs (ERX & ERY) that track the daily performance of the Russell 1000 Energy Index. This index mainly consists of integrated oil companies, E&P oil producers as well as oil well equipment and services.

ERX – Direxion Daily Energy Bull 3x ETF (NYSEArca: ERX)
ERX $33.50 [-0.74]
Average Volume: 3007890
Yield: 0.54%

MER: 0.95%
ERX is designed to return 300% of the daily price performance, before fees and expenses, of the Russell 1000 Energy Index.

ERY – Direxion Daily Energy Bear 3x ETF (NYSEArca: ERY)
ERY $22.42 [+0.48]
Average Volume: 1888060
Yield: 0.00%

MER: 0.95%
ERY’s daily target is to provide investors with 300% of the inverse daily price performance, before fees and expenses, of the Russell 1000 Energy index.

Both Leveraged Oil Stock ETFs, ERX and ERY, were introduced on November 6, 2008. They have excellent liquidity and have become preferred tools for traders looking for 3x leverage for long or short bets on the oil stocks sector.

erx vs ery

ERX & ERY vs WTI OIL Prices

As you can see from the charts, you can catch some very profitable moves. Folks, this is what leverage is all about but it works both ways so make sure you know what you’re doing. You can generate substantial profits thanks to the volatility of oil prices as short term trading opportunities will surface.