Direxion Daily Aerospace 254687DP8 Bond

DFEN Etf  USD 28.84  0.56  1.90%   
Direxion Daily's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Direxion Daily's financial risk is the risk to Direxion Daily stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
  
Check out the analysis of Direxion Daily Fundamentals Over Time.
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Given the importance of Direxion Daily's capital structure, the first step in the capital decision process is for the management of Direxion Daily to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Direxion Daily Aerospace to issue bonds at a reasonable cost.
Popular NameDirexion Daily DIS 73 30 APR 28
Equity ISIN CodeUS25460E6611
Bond Issue ISIN CodeUS254687DP84
View All Direxion Daily Outstanding Bonds

Direxion Daily Aerospace Outstanding Bond Obligations

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DIS 77 30 OCT 25US254687DF03Details
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DISNEY WALT NEWUS25468PBW59Details
Boeing Co 2196US097023DG73Details
DIRECTV HLDGS LLCUS25460CAA18Details
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WALT DISNEY COUS254687EH59Details
DISNEY WALT NEWUS25468PDV58Details
DISNEY WALT NEWUS25468PDK93Details
WALT DISNEY COUS254687EB89Details
DISNEY WALT NEWUS25468PDM59Details
DISNEY WALT NEWUS25468PDN33Details
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US254687DT07US254687DT07Details
US254687DV52US254687DV52Details
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US254687DX19US254687DX19Details
DISNEY WALT NEWUS25468PDF09Details
WALT DISNEY COUS254687DZ66Details
US254687DK97US254687DK97Details
DIS 7125 08 APR 28US254687DM53Details
DISNEY WALT NEWUS25468PCX24Details
DIS 73 30 APR 28US254687DP84Details
US25466AAJ07US25466AAJ07Details
US25466AAE10US25466AAE10Details
US25466AAR23US25466AAR23Details
DISCOVER BK NEWUS25466AAP66Details
US25466AAN19US25466AAN19Details
WALT DISNEY COUS254687FX90Details
WALT DISNEY COUS254687FY73Details
WALT DISNEY COUS254687FZ49Details
WALT DISNEY COUS254687GA88Details
US254687FP66US254687FP66Details
WALT DISNEY COUS254687FQ40Details
WALT DISNEY COUS254687FR23Details
WALT DISNEY COUS254687FS06Details
The Walt DisneyUS254687FV35Details
WALT DISNEY COUS254687FW18Details
US25461LAA08US25461LAA08Details
Morgan Stanley 3591US61744YAK47Details
Morgan Stanley 3971US61744YAL20Details

Understaning Direxion Daily Use of Financial Leverage

Leverage ratios show Direxion Daily's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Direxion Daily's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
The fund invests at least 80 percent of its net assets in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. Aerospace Defense is traded on NYSEARCA Exchange in the United States.
Please read more on our technical analysis page.

Pair Trading with Direxion Daily

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Direxion Daily position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Direxion Daily will appreciate offsetting losses from the drop in the long position's value.

Moving against Direxion Etf

  0.54MEME Roundhill InvestmentsPairCorr
  0.43RSPY Tuttle Capital ManagementPairCorr
  0.4FNGU MicroSectors FANG IndexPairCorr
  0.38DSJA DSJAPairCorr
The ability to find closely correlated positions to Direxion Daily could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Direxion Daily when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Direxion Daily - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Direxion Daily Aerospace to buy it.
The correlation of Direxion Daily is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Direxion Daily moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Direxion Daily Aerospace moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Direxion Daily can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether Direxion Daily Aerospace offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Direxion Daily's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Direxion Daily Aerospace Etf. Outlined below are crucial reports that will aid in making a well-informed decision on Direxion Daily Aerospace Etf:
Check out the analysis of Direxion Daily Fundamentals Over Time.
You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
The market value of Direxion Daily Aerospace is measured differently than its book value, which is the value of Direxion that is recorded on the company's balance sheet. Investors also form their own opinion of Direxion Daily's value that differs from its market value or its book value, called intrinsic value, which is Direxion Daily's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Direxion Daily's market value can be influenced by many factors that don't directly affect Direxion Daily's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Direxion Daily's value and its price as these two are different measures arrived at by different means. Investors typically determine if Direxion Daily is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Direxion Daily's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.

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