2X DOW 30 (LONG & SHORT)
DDM and DXD are exchange-traded funds (ETFs) managed by ProShares that offer investors the opportunity to invest in the Dow Jones Industrial Average (DJIA) with leverage and as a short ETF.
The ProShares Ultra Dow30 ETF (DDM) seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the DJIA. This means that if the DJIA increases by 1%, DDM is designed to increase by 2%. DDM is a “long” ETF, which means it is designed to provide investors with amplified returns when the index it tracks increases.
On the other hand, the ProShares UltraShort Dow30 ETF (DXD) seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the DJIA. This means that if the DJIA decreases by 1%, DXD is designed to increase by 2%. DXD is a “short” ETF, which means it is designed to provide investors with amplified returns when the index it tracks decreases.
Investors who are bullish on the performance of the 30 large-cap U.S. stocks that are included in the DJIA may consider investing in DDM as a way to gain exposure to these stocks with leverage. Similarly, investors who are bearish on the performance of these stocks may consider investing in DXD as a way to hedge against potential losses in a large-cap stock portfolio or as a way to bet on the future decline of the DJIA.
It’s important to note that leveraged ETFs like DDM and DXD carry higher risk and are typically used by sophisticated investors who are comfortable with the potential for higher volatility and potential losses. Additionally, leveraged ETFs are designed for short-term trading and are not suitable for long-term investing.
In summary, DDM and DXD are ETFs that offer investors the opportunity to invest in the DJIA with leverage and as a short ETF. DDM provides investors with amplified returns when the DJIA increases, while DXD provides investors with amplified returns when the DJIA decreases. These ETFs carry different levels of risk and are designed for different investment objectives, so it’s important to do your research and understand the risks before investing.