Volatile Markets Make For Perfect “Direxion Weather,” Says CEO

Risk-fueled and volatile — these are words that investors with low-risk profiles typically don’t want to hear. However, for the uninhibited short-term trader, it’s music to their ears. With that, leveraged exchange-traded funds (ETFs) have seen greater demand this year amid heavier volatility. Douglas Yones, Direxion Investments CEO, visited Bloomberg to discuss the opportunities for current and prospective investors in leveraged ETF products.

“It’s an exciting time to trade,” Yones said. “The markets have performed really well with a lot of volatility so if you’re a trader around volatility, these are the perfect markets — this is Direxion weather. It’s been Direxion weather for a few years now, but certainly this year, it’s been Direxion weather.”

Big tech has certainly been one of the beneficiaries of heavier trading volumes in 2025. Given this, a popular trading tool has been the Direxion Daily Technology Bull 3X ETF (TECL), which has produced an astounding return of 47,000% since debuting in 2008.

Another byproduct of the heavier volatility has been the rise of single-stock ETFs. These allow traders to juice up their exposure to a specific stock. A number of ETF providers, including Direxion, have sought to capitalize on the leveraged phenomenon with the launch of more single-stock ETFs.

The question of additional leverage came up, prompting viewers and the rest of the capital markets to ponder: “Is too much leverage a bad thing?” The Securities and Exchange Commission (SEC) seems to think so, roundly dismissing filings that call for the creation of leveraged ETFs containing as much as 5x leverage.

“We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities,” the SEC said, addressing the applicants for these filings. Direxion is one of those applicants.

Nonetheless, Yones is unfazed. As long as there’s a persistent market for leveraged ETFs, Direxion will carry on with business as usual.

“People tried, the SEC said ‘no’ and we moved on,” said Yones.

TECL data by YCharts

Education is Paramount

When looking at the performances of leveraged ETFs like TECL, it’s easy to get enticed by the outsized alpha. However, investor education is key before looking to dabble in these leveraged fund products. For the most part, they’re used by tactical traders who already have years of market experience under their belt. Those who have the proverbial “diamond hands,” and have held on for the long-term have been handsomely rewarded. However, they’re few and far between.

“Traditionally, most of our traders are just that — they’re traders who are not holding onto these things for that long, but for sure, there’s going to be people in some of these ETFs who’ve held since the beginning,” Yones confirmed.

Nonetheless, Direxion does have a dedicated education center that provides investors with the baseline knowledge, if the prospect of using leveraged ETFs as tactical tools has piqued their interest. From defining exactly what leveraged ETFs are to how best to utilize a certain fund for specific trading scenarios, the education center has a plethora of videos to watch and more importantly, learn from.

“Come to Direxion.com, we’ll teach you how it works,” Yones said.

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