METD
1x Short
Direxion Daily META Bear 1X Shares
Shorts: Meta (META)
Expense Ratio
1.07%
Leverage
1x Inverse
Issuer
Direxion
Inception
Sep 2022
Single Stock Concentration Risk
METD tracks a single company with no diversification. This ETF is designed for short-term trading only.
What METD Shorts
The Direxion Daily META Bear 1X Shares (METD) is designed to deliver the inverse (opposite) of the daily performance of Meta Platforms, Inc. (META) common stock.
It uses financial derivatives like swaps to achieve a -1x daily return. This means if META stock falls 2% in a day, METD aims to rise approximately 2% (before fees and expenses), and vice versa.
Key Risks
- Daily Holding Risk: Returns over periods longer than one day can deviate significantly from the inverse of META's performance due to daily reset and compounding.
- Single-Stock Concentration: Performance is tied to one company, making it riskier than inverse ETFs tracking a broad index.
- High Expense Ratio (1.07%): The fund's costs can erode returns, especially when held for extended periods.
- Derivatives & Counterparty Risk: The use of swaps and other derivatives introduces complexity and potential counterparty failure risk.
- Volatility Decay: In volatile but directionless markets, the fund's value can decay rapidly due to the effects of daily compounding.
Best Use Cases
- Short-Term Hedging: Temporarily hedge an existing long position in Meta (META) stock against a potential short-term decline.
- Tactical Bearish Bet: Express a short-term, bearish view on Meta's stock price without using a margin account or short selling.
- Portfolio Diversification: Used cautiously by sophisticated investors to add a tactical, inverse position to a portfolio.
Similar Instruments
Frequently Asked Questions
Is METD a good long-term investment?
No. METD is designed for daily results. Holding it for weeks, months, or years will likely produce returns that are not simply the inverse of META's long-term performance, often resulting in significant losses due to volatility decay and expenses.
How does METD achieve inverse returns?
The fund primarily uses swap agreements with major financial institutions. These contracts are designed to pay the fund the inverse of the daily return of META stock in exchange for fees.
Can I lose more than I invest in METD?
No. As a long ETF position, the maximum loss is limited to the amount of your initial investment. However, the value can decline rapidly and significantly.