FAZ 3x Short
Direxion Daily Financial Bear 3X Shares
Shorts: Financials (XLF)
Expense Ratio
1.03%
Leverage
3x Inverse
Issuer
Direxion
Inception
Nov 2008
FAZ ETF Quick Answer
FAZ is Direxion's 3x short financials ETF. It seeks daily investment results equal to 300% of the inverse of the Financial Select Sector Index, before fees and expenses. It is built for active short-term views on banks, brokers, insurers, and other financial-sector stocks.
Next step: compare FAZ against broader market shorts and use the short ETF calculator, then verify NAV, market price, volume, index, and expense ratio on the official Direxion FAZ page.
Short Financials ETF Fit Matrix
| Choice | Exposure | Use when | Avoid when |
|---|---|---|---|
| FAZ | 3x inverse financials | You want a concentrated one-day bearish trade on financial-sector stocks. | You cannot monitor intraday risk or tolerate rapid 3x losses. |
| SPXU | 3x inverse S&P 500 | You want broad market downside exposure instead of sector concentration. | Your thesis is specifically about banks or financials underperforming. |
| SQQQ | 3x inverse Nasdaq-100 | Your bearish view is concentrated in mega-cap growth and technology. | You are trying to isolate financial-sector risk. |
High Risk Leveraged Product
FAZ is a 3x leveraged inverse ETF designed for short-term trading only. Daily rebalancing causes significant decay over time. NOT suitable for buy-and-hold investors.
What FAZ Shorts
The Direxion Daily Financial Bear 3X Shares (FAZ) is designed to deliver -300% of the daily performance of the Financial Select Sector SPDR Fund (XLF).
It uses swaps and other derivatives to achieve its daily 3x inverse leveraged goal, making it a tool for short-term bets against major U.S. financial stocks.
Official Source Checks
- Objective: Direxion states that FAZ seeks 300% of the inverse daily performance of the Financial Select Sector Index before fees and expenses.
- Costs: Direxion's product page currently lists FAZ at a 1.03% gross/net expense ratio. Confirm this before relying on stale data.
- Execution: Check current NAV, market price, daily volume, index exposure, spread, and whether a financial-sector trade is preferable to a broad S&P 500 short.
Key Risks
- Leverage Decay & Compounding Risk: Daily reset causes returns to diverge from 3x the inverse of XLF's return over periods longer than one day, especially in volatile markets.
- High Expense Ratio (1.07%): The cost of the fund's complex derivatives strategy erodes returns over time.
- Sector-Specific Risk: Concentrated exposure to the financial sector, which can be impacted by interest rates and regulation.
- Extreme Volatility: The 3x leverage magnifies losses; the fund can lose most or all of its value rapidly.
- Strictly Short-Term Instrument: Not suitable for buy-and-hold investing due to the effects of daily compounding.
Best Use Cases
- Short-term hedging for investors with long positions in financial stocks.
- Sophisticated, active traders making tactical bearish bets on the financial sector for a single day or a few days.
- Expressing a high-conviction, leveraged view on impending negative news for banks and financial services.