Quick Read
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Eric Balchunas said half of the most-traded ETFs in early June were semiconductor-related, a phenomenon he noted having never witnessed before.
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SOXS surged to the top of the volume list after a sharp semiconductor sell-off driven by rising bond yields and rate-hike fears.
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Bearish semiconductor plays have become summer’s hottest trade, echoing Michael Burry’s SOXX puts, with 2X short ETFs on Nvidia and SanDisk among the most notable examples.
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Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and DIREXION DAILY SEMICONDUCTOR BULL 3X SHARES didn’t make the cut. Grab the names FREE today.
The semiconductor rally has continued to act as a trader’s playground. In a recent comment on X, Eric Balchunas, a senior ETF analyst, remarked on a snapshot of his that half of the most-traded ETFs on that day (that was at the start of June) were related to the semiconductor industry.
Balchunas has his fair share of experience, yet he said he’s never seen anything like that. That’s a big deal. And what’s even more remarkable are the volumes in such ETFs. While the snapshot is more than remarkable, things have since settled a bit.
While such semi-related ETFs don’t comprise half of the top ETFs in the volume list, many of them are sticking around. Indeed, there’s been no shortage of momentum and volatility. And until things settle, I’d look for bets for and against the names to keep drawing in considerable interest from across the board.
The 3X semi ETFs have exploded in popularity
As it stands today, the Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA:SOXS) is at the top of the list. After last Friday’s plunge in the semiconductor stocks, sparked by rising bond yields and fears that hot jobs could cause rate increases, it should be no mystery as to why this aggressive ETF is back in the spotlight.
Indeed, for those seeking to maximize their gains in a reversal of the semiconductor trade, the Direxion Daily Semiconductor Bear 3X Shares is the instrument of choice. Of course, it’s a risky play, but now that there are prominent dents in the armor of the semiconductor trade, perhaps there are a slew of investors who want to swing for the fences.
After all, the great Dr. Michael Burry from The Big Short is still betting against the semiconductors with bearish put options against the iShares Semiconductor ETF (NASDAQ:SOXX). While it’s not quite the same trade, the idea is pretty much the same. Some prefer to go down the route of options, while others would be happy with a levered short ETF against an industry.