Direxion Daily Financial Bear 3x ETF

FAZ

Market cap $126M

Another earnings season means traders will be treated to a slew of updates from the financial services sector. In fact, some of have already arrived, suggesting that bank ETFs may be worth a look.

The financial sector staged a sharp recovery, and the market has decided the worst is over.

Q1 earnings reports have come in from four prominent names in the financial sector—Goldman Sachs, JP Morgan Chase, Wells Fargo, and Citigroup.

The Direxion Daily Financial Bear 3X Shares was a star during the global financial crisis. The ETF still has its limited uses, but don't expect 2008 levels of performance.

The first month of 2026 is already in the books. Which sector walked away with the top spot when it came to total returns?

Big bank stocks have been on a tear, creating an opportunity for contrarians. Direxion Daily Financial Bear 3X Shares (NYSEARCA:FAZ) offers a way to bet against the financial sector with triple leverage.

While the market's attention has largely concentrated on major headlines such as the blistering technology ecosystem, the Federal Reserve's shifting stance on monetary policy deserves careful consideration. Last month, the central bank cut its benchmark interest rate by 25 basis points, thus delivering a widely expected move that ended a nine-month policy pause.

Understand the construction of financial instruments to ensure they align with your investment goals and avoid frustrating those goals by using the wrong instruments. Leveraged ETFs are designed for short-term trading, not long-term holding, due to daily resets and time value decay in derivatives. FAZ, a 3x leveraged bear ETF for the financial sector, should be used for daily trading or speculation, not as a buy-and-hold investment.

Leveraged inverse ETFs like FAZ can be used to gain from market declines, especially in the financial sector, but are not long-term investments. These ETFs should be held for no longer than a single trading day due to price decay and daily rebalancing risks. Timing trades using momentum indicators like RSI can help capture gains, but caution is advised to avoid overuse and potential losses.

Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods.