Direxion has expanded its suite of single-stock leveraged ETFs with the launch of the Daily SpaceX Bear 2X ETF (ticker: LOFD) on Thursday. The new fund seeks daily investment results, before fees and expenses, of 200% of the inverse of SpaceX's daily performance, effectively offering traders a -200% leveraged bet against the space exploration company.
The bear fund complements the Daily SpaceX Bull 2X ETF (ticker: LOFF), which began trading on June 15, just days after SpaceX's much-anticipated initial public offering. The IPO, which priced on June 12, was the largest in history, with the company's valuation surpassing $2 trillion at the close of its first trading day. The listing triggered a wave of product launches across the ETF industry, with index providers fast-tracking SpaceX for inclusion in major benchmarks such as the Nasdaq 100.
Mo Sparks, chief product officer at Direxion, said in a statement that the new fund completes a toolkit for traders who want to act on conviction in either direction. "LOFF gave them a way to express the bull case on SpaceX. LOFD adds the bear side, and a way to hedge, arriving as the stock heads into a stretch of closely watched catalysts," Sparks said.
SpaceX reported its first quarterly earnings as a public company earlier this week, posting record revenue. However, the company's aggressive spending on artificial intelligence weighed on the stock in the immediate aftermath of the report. Shares recovered to close Thursday's session up more than 6%, but they remain down more than 23% from the IPO price. The volatility has drawn attention from advisors and traders, particularly as SpaceX shares plunged 19% earlier in the week on AI capex concerns.
Direxion already offers similar bull and bear products for Tesla, another Musk-led company. The Daily TSLA Bull 2X Shares (ticker: TSLL) and Daily TSLA Bear 1X Shares (ticker: TSLS) have been popular among retail and institutional traders seeking leveraged exposure to the electric-vehicle maker. The SpaceX funds follow the same playbook, targeting traders who want to amplify daily moves in a single stock.
The launch comes at a pivotal time for SpaceX, with the first earnings and lockup expiry setting up a pivotal week for advisors and their clients. The lockup expiration, which allows early investors to sell shares, could add further volatility to the stock. For financial advisors, the availability of a bear ETF provides a hedging tool for clients who hold SpaceX shares but are concerned about near-term downside.
Industry observers note that leveraged single-stock ETFs are designed for short-term trading, not long-term buy-and-hold investing. The daily reset mechanism means that returns can diverge significantly from the underlying stock's performance over longer periods. Direxion's products carry high expense ratios and are typically used by active traders.
The broader market context remains supportive of SpaceX's long-term story, with the company's $60 billion Cursor deal highlighting private market value creation, according to one fund manager. However, the stock's post-IPO slide has created opportunities for bearish traders. The new LOFD fund allows them to profit from further declines, or to hedge existing long positions.
As of Thursday's close, SpaceX's market capitalization stood at roughly $1.54 trillion, down from its peak above $2 trillion. The stock's volatility has also drawn attention from major wealth managers. Morgan Stanley reported that its wealth management unit attracted $148 billion in net new assets in the second quarter, fueled in part by the SpaceX IPO. JPMorgan also posted record quarterly profit, citing trading activity around the listing.
For advisors, the new bear ETF adds another tool for managing client portfolios in a stock that is likely to remain in the headlines. Whether used for speculation or hedging, LOFD offers a direct way to express a negative view on SpaceX, complementing the bull fund launched last month.
