It is a leveraged ETF, not a company stock.

According to the official Direxion explanation checked on 2026, 10, 20, the benchmark for both products is the NYSE Semiconductor Index. It is not a 3 times product of the entire Nasdaq 100 or a single stock like Nvidia. This is an example explaining the structure using actual products, not a recommendation to buy specific products.

The 3x multiplier applies for one day.

The daily objective is based on the daily measurement period set by the manager. It does not mean that you will get exactly 3x returns from the moment you buy in the afternoon until the next afternoon. If your intraday purchase price differs from the fund's reference period, your realized return will vary.

Because exposure is adjusted to maintain the daily target, the next day's starting point is the changed asset value. Therefore, if the index rises by 10% over a month, it does not necessarily mean SOXL rises by 30% or SOXS falls by 30%.

Even if the index remains flat, both could result in a loss.

Let's calculate a hypothetical product that achieves its daily objective exactly with no costs. For an index to return from 100 to 110 and then to 100, it would be +10% on the first day and approximately −9.09% on the next.

This does not mean it is always a loss, nor does it mean it will recover if you wait.

Repeated gains and losses significantly impact the cumulative results of leverage products. Conversely, in a hypothetical path with a consistent trend, a compounding effect more favorable than the simple multiple may occur. The key is that the intermediate path and holding period are critical.

Buying SOXL and SOXS with the same amount of money does not create a principal-protected portfolio. Due to daily rebalancing and costs, both products can suffer losses simultaneously. Statements like “long-term holding always leads to losses” or “semiconductors will eventually rise, so recovery is guaranteed” are both definitive claims about the outcome.

Risks are compounded beyond just leverage.

Because it is concentrated in the semiconductor sector, shocks from industry conditions, earnings, and regulations can act simultaneously. Structures using derivatives involve counterparty and liquidity risks, as well as management fees and tracking differences. You must check the latest prospectus for exact methods and costs. This is a product where you must consider the possibility of losing your entire investment.

If your hypothetical investment drops by 50%, it must rise by 100% to return to the principal. If it drops by 80%, a 400% rise is required. The fact that the price has dropped significantly does not make recovery easier. Additional purchases increase not only the average cost but also the total amount of capital exposed to risk.

The buy and sell buttons do not eliminate risk.

If bid-ask spreads and execution conditions change, the price on the screen may differ from the actual transaction price. Market orders do not guarantee a price, and limit orders do not guarantee execution. Even if you place a stop-loss order, the result may differ from your planned price during rapid price movements.

Buying an ETF with cash is separate from investing on margin or with borrowed funds. Adding personal leverage on top of the leverage within the ETF creates additional risks, such as interest and repayment obligations. Since these are US dollar-denominated products, exchange rates and currency conversion costs are also added for Korean investors.

What should domestic investors check?

Popularity or trading volume is not evidence that a product is suitable for you. For structures you do not understand, you can start by checking educational materials and hypothetical calculations. Simulated trading does not perfectly replicate actual liquidity, execution, or investor psychology.

1. 1

   Check the ticker, underlying index, multiplier, and daily target in the latest materials from the asset manager.

2. 2

   Check the mandatory education, registration of the completion number, and trading requirements for each account at your domestic brokerage.

3. 3

   Calculate management fees, trading costs, currency exchange fees, and potential losses in KRW separately.

4. 4

   Assess whether you can continuously monitor volatility and how a significant loss would impact your living expenses and repayment obligations.

Check what you have read.

• Can you explain what it is, for what period, and by what multiple?
• Have you calculated the recovery rate needed after a large loss?
• Have you checked the education, account requirements, and transaction costs?
• Have you distinguished between KRW returns and USD returns?

Apply what you read to the actual screen

Try it on WAPE

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