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LOFF and DOWN: Direxion Has Filed Leveraged SpaceX ETFs Before SpaceX Has Actually Listed

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Direxion filed prospectuses this week for two leveraged single-stock ETFs on SpaceX. The products will offer 2x daily bull and 2x daily bear exposure to Space Exploration Technologies Corp. via swap agreements, at an expense ratio of 0.97%.

The tickers are LOFF and DOWN.

The product cannot yet begin operations. The filing is explicit on this point: SpaceX's IPO has not yet completed at the time of registration. The fund is, in effect, a bet on a bet, structured and prospectused and ready to go, waiting in the car park while the IPO finishes parking.

This is not a criticism. The mechanics of launching a leveraged single-stock ETF require regulatory lead time, and filing before the underlying begins trading is the rational approach if you want to be ready on day one. Several other issuers are doing the same thing. The race to offer leveraged SpaceX exposure is, by this point, well underway.

What makes LOFF and DOWN notable is simply the precision of the ambition. SpaceX is about to complete what may be the largest IPO in history. The moment the stock starts trading, a product will exist to let you be twice as right about it, or twice as wrong, depending entirely on timing and direction.

The fund description notes that SpaceX designs and manufactures rockets and spacecraft, operates the Starlink satellite constellation, and builds artificial intelligence tools. This is accurate. It is also, by the standards of the things being built, a fairly measured sentence.

LOFF and DOWN are ready when you are.

Bernie Thurston

Bernie loves data. Fortunately for him, London’s finance industry has been indulgent, providing him lots of benchmark data to play with and enjoy. Bernie’s journey began at Sky, where he designed the first interactive television and helped build a technical-based charity (ctt.org). He then hopped over to finance, and soon found himself at a start-up working on dividends and derivatives. Then, by nature of the fact that finance and technology have rapidly conjoined, he found himself working with Credit Suisse to build an index aggregation and distribution platform. Markit then acquired the start-up and Bernie battled his way up the greasy pole becoming the Managing Director of Markit’s equities division, with responsibility for index, ETF and Dividends. But the siren song of startups called once more. And Bernie was headhunted to rescue a failing index business. Over five years, he helped reverse the fortunes of DeltaOne Solutions, turning into a fighting force. So successful was the turn around that Markit came along and acquired this company as well. But Bernie still loved start-ups. To that end, he founded Ultumus, an ETF and benchmark data company. Ultumus aims to provide the best data in the most timely and consumable manner possible. With clients on both buy and sell side, when something happens in the index or ETF industry, Ultumus is the first to know.

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