SOXL: Volatility Is Crushing The Leveraged Semiconductor Funds

Summary I remain bearish on SOXL, as I find 3x levered ETFs to be inherently risky and this is an inopportune moment for the fund. Chip stocks have traded better over the past week but remain stuck in a back-and-forth range. Semiconductor stocks face risks from AI funding, regulatory headwinds, and high starting valuations, limiting the bullish setup for the time being. I am maintaining short positions on both SOXL and SOXS, expecting continued erosion of these leveraged ETFs amid ongoing high volatility. Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More » Getty Images Semiconductor stocks started off the week with a bang, as the benchmark iShares Semiconductor ETF ( SOXX ) jumped 5% on Monday, though trading has been more mixed over the subsequent couple of days. With SOXX's rebound, the chip stocks This article was written by Ian Bezek 23.86K Followers Follow Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets. Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More. Analyst’s Disclosure: I/we have a beneficial short position in the shares of SOXL,SOXS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.