A subscriber has forwarded me an explanation for the strange underperformance by NUGT in recent days, which is reproduced below…
"Due to significant market disruption and volatility on March 24, 2020, the Direxion Daily Gold Miners Index Bull 3X Shares (NUGT) and Direxion Daily Junior Gold Miners Index Bull 3X Shares (JNUG) will not have exposure of 300% to the market today. At market open, the Direxion Daily Gold Miners Index Bull 3X Shares and Direxion Daily Junior Gold Miners Index Bull 3X Shares will have exposure of approximately 220% and 220%, respectively. This reduced exposure is for today, March 25, 2020, only.”
Also, from another subscriber…
“I called Direxion and asked about this. The said they can't (won't?) handle 3X due to market conditions. The estimated leverage for today is 2.6X. Starting sometime in May they will be permanently changing NUGT and JNUG to 2X.”
We have a limited profit in this (about 8%) at the time of writing which could disappear in a flash if the sector reverses, as attitudes toward this ETF may have been adversely affected by these developments.
TAKE PROFITS IMMEDIATELY AND AVOID THEREAFTER.
Posted at 9.55 am EDT on 26th March. NUGT at $9.96.