ONX delivers 2x daily leveraged exposure to ON Semiconductor (ON), a major power semiconductor manufacturer serving automotive and industrial markets. This single-stock leveraged ETF allows traders to make amplified directional bets on ON's daily price movements without using margin or options.
How It Works
The fund uses swap agreements and other derivatives to achieve 200% of ON Semiconductor's daily performance, resetting exposure each trading day. Unlike broad semiconductor ETFs that dilute exposure across dozens of names, ONX concentrates entirely on one company's fortunes. The daily reset mechanism means holding for multiple days creates path-dependent returns that can deviate significantly from 2x the cumulative stock performance.
Key Features
- Pure-play 2x leverage on ON Semi, a leader in automotive chips and power management semiconductors
- No management fee structure makes this cheaper than paying margin interest for leveraged exposure
- Intraday liquidity allows nimble trading around ON's earnings, product launches, or auto sector news
Risks
- Daily compounding can destroy value fast — a 10% drop followed by 11.1% gain leaves you down 4% despite the stock being flat
- Single-stock concentration means company-specific disasters (failed products, lost customers) hit twice as hard
- Semiconductor cyclicality amplified 2x — when the chip cycle turns, losses accelerate rapidly
Who Should Own This
Built for short-term traders with high conviction on ON Semiconductor's near-term direction — think days or weeks maximum, not months. Useful for those betting on specific catalysts like automotive production data, EV adoption rates, or ON's quarterly results. Absolutely not suitable for buy-and-hold investors or anyone who can't monitor positions daily.