Jun. 17 at 2:32 PM
$BABU Direxion typically batch-reviews its leveraged ETFs for splits and consolidations multiple times a year, often acting when share prices slide below
$5.00.THE Direxion Daily BABA Bull 2X ETF (BABU) is currently trading at
$9.98. This puts it comfortably above the usual danger zone where fund managers step in to split shares.
Because BABU rebalances daily to achieve its 2X leverage goal, a sideways or highly volatile Alibaba (BABA) stock price will erode your capital over time, even if BABA eventually returns to its starting price.
With an average daily volume of roughly 39,000 shares, BABU is a smaller niche fund. High volatility can trigger wider bid-ask spreads, making entry and exit prices slightly less efficient.
Caveat Emptor
