23 April 2020

Direxion reverse splits of 12 ETFs effective 23 April 2020

 
 

Direxion has announced it will execute a reverse split of the issued and outstanding shares of twelve ETFs (each, a "Fund" and collectively, the "Funds").

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The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.

After the close of the markets on April 22, 2020, each Fund will affect reverse splits of its issued and outstanding shares as follows:
Fund Name Reverse Split Ratio Approximate decrease in total number of outstanding shares
Direxion Daily MSCI Brazil Bull 2X Shares 1 for 35 97%
Direxion Daily Junior Gold Miners Index Bear 2X Shares 1 for 25 96%
Direxion Daily Gold Miners Index Bear 2X Shares 1 for 25 96%
Direxion Daily Technology Bear 3X Shares 1 for 10 90%
Direxion Daily Regional Banks Bull 3X Shares 1 for 10 90%
Direxion Daily S&P 500® High Beta Bull 3X Shares 1 for 10 90%
Direxion Daily 20+ Year Treasury Bear 3X Shares 1 for 10 90%
Direxion Daily Junior Gold Miners Index Bull 3X Shares 1 for 10 90%
Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares 1 for 10 90%
Direxion Daily Retail Bull 3X Shares 1 for 10 90%
Direxion Daily Junior Gold Miners Index Bull 3X Shares 1 for 10 90%
Direxion Zacks MLP High Income Index Shares 1 for 8 88%
Direxion Daily Gold Miners Index Bull 3X Share 1 for 5 80%


 
 

06 April 2020

Additional Cautionary Note with holding and trading of Leveraged Products

 
 

Information source from Credit Suisse: Credit Suisse cautioned investors on Friday that buying a leveraged exchange-traded note sponsored by the bank could result in complete loss of their original investment. The investment bank said that VelocityShares 3x Inverse Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return DWTIF, -58.33%, which trades on the over-the-counter, or OTC, has fallen below an indicative value of $0, as of April 2, 2020. Credit Suisse said that purchases of the ETN after that date "will likely suffer a complete loss of their investment." The ETN tries to deliver triple the daily inverse returns of the S&P GSCI Crude Oil Index, but has been hammered by wild moves in crude oil in recent days. On Friday, battered crude-oil prices CL.1, +2.32% were up 9.64% at $27.76 a barrel on the New York Mercantile Exchange after surging 24.7% on Thursday. The VelocityShares web site indicates that the ETN is intended for "sophisticated investors to manage daily trading risks using a short-term investment."

 
 

30 Mar 2020

Important Announcement on trading of US ETF and ETN

 
 

The sponsors of ProShares and Direxion announced recently that they will be liquidating and closing a number of their ETFs. Given that this could be an increasing trend with leveraged ETFs in the near future, it is extremely important that clients monitor and keep up to date with the news surrounding the ETF and their sponsors.

For those ETFs that have halted trading and are now in liquidation mode, please note that the potential for unexpected losses still exist, even if the ultimate outcome to clients is still unknown and will only be known when liquidation and distribution/redemptions are made within the next week.

Kindly refer to the PDF for more information here.

 
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