Shawn Edwards from Direxion Talks Energy ETF's & SpaceX Single Stock ETF LOFF -The Tom O'Brien Show!
Watch on YouTubeVideo summary
The video features an interview with Shawn Edwards, an institutional ETF strategist from Direxion, who discusses current market volatility and specific investment opportunities across various sectors. The conversation begins with the energy sector, where crude oil prices have remained resilient near $84 a barrel despite ongoing geopolitical tensions in the Middle East and fears of supply disruptions around the Strait of Hormuz. Edwards highlights that these conditions create trading potential for investors seeking exposure to energy price swings, noting that elevated oil prices could also reignite inflation concerns and influence interest rate outlooks, as evidenced by the 30-year Treasury yield reaching its highest level since 2007.
To capitalize on this volatility, Edwards presents a suite of tactical, short-term trading tools designed for daily use. For energy traders, he recommends leveraged ETFs such as ERX and ERY for double exposure to the energy select sector index, while GUSH and DRIE offer similar leverage specifically to the oil and gas exploration and production industry. He also introduces TEXU, a newer product providing double exposure to the top five energy companies including Exxon, Chevron, and Schlumberger. Beyond energy, he addresses the interest rate environment by suggesting TMF and TMV for trading long-term Treasury bonds, as well as TYO and TYD for shorter-duration instruments, allowing traders to position themselves whether they are bullish or bearish on bond prices.
The discussion then shifts to the semiconductor sector, which is currently under scrutiny ahead of Nvidia's earnings report next week. Edwards explains that while AI spending remains strong, investors are closely watching if growth can meet expectations, making this a prime area for volatility trading. He offers NVDU for double bullish exposure and NVD for inverse exposure to Nvidia stock, allowing traders to hedge or speculate without selling their underlying positions. For broader sector participation, he points to SOXL for triple leverage on the semiconductor index and SOXS for inverse exposure, while also introducing TSXU and TSDX as concentrated funds focused on hyperscalers like Nvidia, Micron, Broadcom, AMD, and Taiwan Semi. Additionally, AIBU and AIBD are presented as options for those wanting to trade the artificial intelligence and big data themes with double leverage.
Finally, the interview concludes with a focus on the space sector, specifically targeting SpaceX stock which is set to unlock additional shares soon, potentially increasing supply and volatility. Edwards introduces LOFF, a fund offering double bullish exposure to SpaceX, alongside its inverse counterpart, LFD, which provides double bearish exposure. These instruments are designed as tactical tools for short-term traders who wish to take positions on the stock's performance without holding it directly. Throughout the segment, Edwards emphasizes that these products are intended for active management and daily monitoring, directing listeners to Direxion's website for further details on these specialized ETFs.
Read the full video transcript
Welcome back, folks. We got an S&P right
now up by 22 points. NASDAQ down by 33.
And right now, folks, we're going to
talk to Shawn Edwards. Sean is with
Direction. He's institutional. He's a
vice president, folks. Excuse me.
Institutional ETF strategist. We talk to
Shawn about once a month and we talk
about ETFs. And folks, if you want to
find out more about directions, great
products. You can head on over to the
front page of TFN, TFN, you see those
great direction banners over there. And
yeah, we're going to talk about some of
those ETFs right now. Sean Edwards, good
afternoon. Welcome back to TFNN.
>> Hey, good afternoon, Tommy. Uh, and
thanks again uh for having me. Another
exciting day to talk some volatility
that we're seeing in the markets and
ways to take advantage using our ETFs.
>> You know, it's pretty cool, Sean. The
yields in focus today, but we just got
Fed minutes, of course. Um, but I wanted
to kick it off if we could with with
some of the energy. You know, crude, of
course, handling things pretty well, all
things considered. We're at $84.36
right now for a barrel. But I I wanted
to talk about crude because man, we got,
you know, we're 6 months almost into the
the skirmish, the war with Iran, and
crude price is handling it pretty well.
But for those energy traders out there,
you guys have some great ETFs. Can we
kick it off with maybe some energy for
traders looking for some exposure to the
energy sector?
>> Absolutely. Uh and as you mentioned,
Tommy, the Middle East tensions are back
in focus as hopes for a US Iran
progress. They they are fading. The
straight of hormuz remains restricted.
So it impacts a key route for roughly
20% of global oil consumption. As you
mentioned, Brent cruise around 84 was
around or above 90 uh dollars uh
yesterday near a 3-week high. So as
markets are continuing to price in
prolonged supply disruption as a result
of the tensions around the straight of
horses. So, for those traders who want
to trade the volatility around energy,
I'm going to list off a few different
ETFs that you can look at trading to
take advantage of some of those swings.
As we know, higher oil can reignite
inflation concerns that influence rates.
So, there are quite a few trading
opportunities within energy, but then
also rates. Uh to start with energy, you
can look at ERX and ERY. Uh that's our
pair for the direction daily energy bull
and bear 2x ETFs provides exposure to
the energy select sector index. Again
these are tactical short-term trading
tools is providing that daily exposure
to that index 2x daily exposure. Uh
secondarily you can look at uh gush and
drip. We've talked about this particular
ticker symbol I feel like all year Tommy
uh just because it's providing exposure.
Right. Exactly. It's providing exposure
to the S&P oil and gas and exploration
and production select industry index. So
that is bull and bear 2x exposure on
that index. So as we are seeing these
swings in the price of oil, this is
where we're seeing traders uh trade in
and out of gush and drip throughout the
year. Now also a newer strategy that we
launched uh not more than a year old.
The ticker symbol there is TEXU.
That's a direction daily energy top five
bold 2x ETF. So you're going to get
exposure to energy related companies.
Some of the top companies like Kicole
Phillips, Exxon, Chevron, SLB, and then
Williams. So within our energy um you
know suite of leverage ETFs, there's
quite a few options that you can look at
taking advantage of. And as I mentioned,
higher oil, it does complicate the rate
outlook. Uh we did see the Fed uh you
know did announce that buyback of of
bonds as well. So we're seeing that the
Fed is looking to take action as well,
but oil also impacts uh the rate
outlook. So we see the 30-year Treasury
yield, it reached 5.33%,
so the highest since around 2007. So uh
if these oil uh prices stay elevated,
long duration bonds could uh remain
under pressure. So for those traders
that are looking to trade volatility
volatility around interest rates, you
can look at trading ticker symbol TMF
and TMV. So that gives you exposure to
the long end of the curve with the
exposure being the ICE US Treasury 20
plus year bond index. So again, TMF uh
if you're bullish bond prices, TMV if
you're bearish bond prices. So again,
the direction daily 20 plus year
treasury bull and bear 3x ETF for the
shorter end of the curve. So, the seven
to the 7 to 10year Treasury bull and
bare uh ETFs. You can look at TYO and
TYD. Uh so, again, that's the 7 to
10year Treasury uh bond index. So, quite
a few tickers. I know I I read off quite
a few, Tommy, but I think they could be
helpful for the traders that are
listening currently.
>> Oh, and boy, those yields, man. You
know, the the headlines almost write
they don't they do write themselves as
in like highest 30y year in almost 20
years was coming out there. And so the
the they're going to see what they can
do and and pretty cool when you you know
you guys at direction you bring the the
three times to some of those leverage.
And so check it out folks TMF TMV.
Pretty cool. You get some types of three
times when boy we got some volatility in
yields right now man. Uh jumping from
there Sean going to we're in earnings
man and I'm always talking about the
single stock ETFs but semis in in
particular but the the the big dog mania
they got earnings coming up. Uh you guys
got some great ETFs for Nvidia of
course, but talking about semis, please
talk to me and the traders, what what
you guys have um in focus with the semis
and Nvidia earnings coming up.
>> Absolutely. Nvidia reports next week, we
all know Nvidia is the bell weather when
it comes to semiconductors. Um AI
spending remains strong, but I think
many uh traders, investors, they're
they're looking to see whether or not
the growth can keep pace with uh the
expectations that we have as investors
and traders. So we're looking to Nvidia.
So for those traders that want to trade
volatility around Nvidia's earnings, you
can look at ticker symbol NVDU which
provides 2x exposure bull exposure uh to
the underlying performance of Nvidia on
a daily basis. Or you can look at the
inverse which is NVD which provides
inverse 1x bare exposure to the
performance of Nvidia common stock. So
NVDU if you are bullish you want 2x
exposure. NVD if you're bearish if you
want to uh you know hedge your current
position or if you're just simply
bearish
>> pretty cool and not to jump in but for
those investors out there folks if you
got positions in Nvidia and you just
want to go risk off without selling your
position right and taking that capital
hit it's a great use in that capacity
too um which is pretty cool
>> absolutely thank you for that Tommy uh
and then if you want broader exposure to
the semiconductor sector our largest ETF
which we have seen seen uh tremendous
flows in and out as traders look to uh
you know take advantage of the
semiconductor trade is SO XL. I know
many of your traders are probably
trading in that currently. Again, SOXL
3x bull ETF on the semiconductor index.
>> Pretty cool. Those semis, we're going to
be writing about those for years, Sean.
I mean, these moves, right?
>> The volatility there is amazing. Uh and
then also, if you're bearish, you can
look at ticker symbol SOXS. That's uh
inverse exposure to the NYSC
semiconductor index. And then again uh
one of our newer launches if you want
concentrated exposure to some of those
hyperscalers or semiconductor names uh
you can look at Nvidia, Micron,
Broadcom, AMD and Taiwan Semi. You can
look at our top five semiconductor ETF.
That ticker symbol there is TSXU and
TSXD.
And for those traders that want to trade
the theme of AI, you could look at
ticker symbol AIBU
and AIBD. That's the direction daily AI
and big data bull and bear 2x ETF. So
some of the names mentioned they're
within that broad basket of stocks that
give you exposure to those companies
participating in artificial intelligence
and big data.
>> And hey, we only have one minute left,
but I got to get in to Liftoff and
SpaceX and Tesla as well. You guys have
the bearish one now as well. I saw man,
you know, Liftoff is two times, but you
got the bearish. So please talk to me
about Liftoff and LFD, please.
>> Sure. Really quickly, I think uh many of
the traders are familiar with loft. So,
liftoff LF 2x exposure to SpaceX. Now,
we recently launched inverse 2x exposure
to SpaceX as well. We're going to see uh
tomorrow uh 319 million additional
shares becoming eligible for trading.
So, additional supply creating
volatility. You can trade the bull or
the bear. Whether you're bullish or
bearish, SpaceX, we have the tools for
you. Again, tactical short-term trading
tools. monitor your trades daily. Uh,
and as always, go to our website for
more information. Again, thank you,
Tommy,
>> Sean. Great stuff, man. Two times,
folks, on the bull and the bear on
SpaceX as those unlocking. Sean,
appreciate it, man. Look forward to
talking to you next month. Thanks so
much, brother.
>> No problem, Tommy. Talk to you.
>> Have a good one. We'll come right back.