Direxion Daily Consumer Discretionary Bull 3X Shares (WANT) seeks to deliver 300% of the daily performance of the Consumer Discretionary Select Sector SPDR Fund, which tracks companies selling non-essential goods like automobiles, retail, hotels, and entertainment. This leveraged ETF amplifies exposure to consumer spending trends through derivatives.
How It Works
WANT uses swap agreements and futures contracts to achieve triple the daily returns of its underlying consumer discretionary benchmark. The fund resets its leverage ratio daily at market close, meaning it targets 3x exposure fresh each trading day rather than over longer periods. Holdings consist primarily of derivative instruments rather than direct stock ownership. Daily rebalancing is automatic and mechanical, with no active stock selection or fundamental analysis involved in the process.
Key Features
- Provides 3x leveraged exposure to consumer discretionary sector, amplifying both gains and losses compared to unleveraged alternatives
- Daily reset mechanism means performance compounds differently than 3x the underlying sector's multi-day returns
- Targets companies benefiting from consumer spending trends including Amazon, Tesla, McDonald's, and Home Depot through derivatives
Risks
- This ETF can lose value rapidly due to daily compounding effects—if consumer discretionary drops 10% then rises 10%, WANT does not return to break-even
- Consumer discretionary stocks are highly sensitive to economic cycles and could decline 40-60% during recessions when consumer spending contracts sharply
- Leveraged structure means volatility decay erodes returns over time, making this unsuitable for holding periods longer than days or weeks
Who Should Own This
Best suited for experienced traders with high risk tolerance seeking short-term tactical exposure (hours to days, maximum few weeks) to consumer discretionary momentum. Requires active monitoring and strict stop-losses. Should represent no more than 1-3% of total portfolio given extreme volatility and daily reset mechanics.