EXCLUSIVE: Meta's AI, Metaverse Growth Drive Launch Of New Direxion Leveraged And Inverse ETFs

In an exclusive interview with Benzinga, Ed Egilinsky, managing director and head of Sales and Distribution & Alternatives at Direxion, talked about the Direxion Daily META Bull 2X Shares METU and Direxion Daily META Bear 1X Shares METD. These ETFs seek to address the growing demand among traders for leveraged and inverse single stock ETFs.

Egilinsky said that the inclusion of Meta Platforms Inc META in their lineup was a natural progression, give that “META was the sole omission of the Mag 7 within our leveraged and inverse single stock lineup.” Meta’s prominence in the AI movement and its frequent media presence make it an attractive stock for traders seeking to capitalize on short-term price movements.

Also Read: Missed Apple Rally? This Expert Says Focus On ‘Winner…in The Magnificent 7’ Club: ‘72% Of Meta’s Activity Over The Last 2 Weeks Has Been Bullish

Impact of Meta's Innovations

Meta’s stock has seen substantial growth over the last few years, “with their core businesses of social media platforms, combined with the potential new growth engines within AI (Meta AI), and the virtual reality space/metaverse,” said Egilinsky. “There will certainly be enough catalysts, which include potential regulatory hurdles,” he added.

These developments could influence the performance of METU and METD, providing traders with various catalysts to consider. Put simply, these ETFs provide “traders an opportunity to capitalize on the short term price movement of the stock, regardless of direction,” Egilinsky said.

“Time will tell if Meta continues to grow its revenue and support its current valuation or even higher,” said Egilinsky. It all depends on its ability to overcome potential regulatory challenges and continue innovating.

Also Read: Meta Faces Rising Risk Of Free-Cash-Flow Burn As Creator Payouts Evolve, Says Analyst

Opportunity For Meta-Focused Active Traders

“Meta is one of the most widely held stocks”, said Egilinsky, and is known for its significant moves and innovation in AI and the metaverse. These factors create ample trading opportunities, making the new ETFs appealing to active traders.

Egilinsky emphasizes that METU and METD are designed for those looking to leverage short-term trading opportunities.

Meta is a key player in the Magnificent Seven, a group of stocks significantly impacting the S&P 500 and NASDAQ 100.

• For investors with substantial gains in Meta stock, METD offers a way to hedge and protect those gains.
• Conversely, traders bullish on Meta's continued growth can use METU to amplify their returns.

However, Egilinsky stresses that these ETFs require daily monitoring and are not suitable as long-term investments.

Egilinsky’s Caveat for Meta Stock Investors

Egilinsky advises that potential traders understand the mechanisms of these ETFs before diving in. “These shouldn't be viewed in the same light as owning the common stock, as there is additional risk associated with leveraged and inverse ETFs. A potential trader should understand the mechanisms on how leveraged and inverse ETFs work before considering trading them,” he added.

With Meta’s ongoing innovations and significant market presence, these ETFs present unique opportunities for those willing to navigate their complexities and inherent risks.

Read Next: Nvidia ETFs Take Center Stage As Bears, Bulls Duke It Out With 8%-14% Swings

Photo: Shutterstock