Ed Egilinsky, Managing Director, Head of Sales and Distribution & Alternatives at Direxion, joins Cheddar News to discuss trading bank volatility, how traders can navigate the race in the A.I. space, and how traders are reacting to the most recent economic data.

<div class="block">Ed Egilinsky, Managing Director, Head of Sales and Distribution &amp; Alternatives at Direxion, joins Cheddar News to discuss trading bank volatility, how traders can navigate the race in the A.I. space, and how traders are reacting to the most recent economic data.</div><div class="block"><i>Headline updated March 15, 2023 at 2:10 p.m. ET to add context.</i></div>

'Buyer Beware': Warning to Trade With Caution Amid Short-term Trading Volatility

In our next segment. Trader nation brought to you by direction E T S. We explore how investors and traders can position their portfolios for the future with directions, expanded suite of E T s. We're about halfway through another wild trading week, Silicon Valley Bank's collapse, making huge headlines as investors away on how this might impact rates broader markets. And joining us now is at a Glinski managing director and head of sales and distribution and alternatives that direction and thanks much for joining us. Welcome back to the show. Let's kick things off and talk about SVB Financial Group. What tools are active traders using to trade the volatility in the banks, especially on the back of credit Suisse mail. Yeah, we're certainly seeing unprecedented volatility in the regional banks and the broader banking sector itself case in point this morning. So for those active traders that are looking to take advantage of short term price movements, especially in this market, we're seeing tremendous volume in our triple leverage SMP regional bank uh index D P S T. In fact, the last couple of days, the volume has well exceeded the assets within the fund then uh in times like this, you'll see tremendous turnover, people trading in Intraday or in a given day as these are designed to short term trading vehicles. We're also seeing significant flows probably 4 to 6 times the average daily volume in the lock in the likes of F A S F A Z, which those are triple leverage based on the broader banks, insurance companies within the U S, the S and P financial select sector index. So as you can imagine, traders are taking both sides of the trades. I also cautious caution people that these are designed to shore term trading vehicles, they're very volatile just to give you an example. The S and P regional banks over the last couple of weeks, the non leveraged index is down 26%. If you were on triple leveraged E P S T and you held it over just a short period of time, you would be down significantly. So let the buyer beware. Uh and, and uh trade with caution. Absolutely. And I also want to draw attention to, of course, you know, Biden's comments the other day suggesting that investors in Silicon Valley Bank signature bank, they would not be protected. You know, we've been focusing obviously a lot on the consumer angle, businesses and consumers that have their savings in Silicon Valley Bank. But what about investors? You know, what does this mean moving forward? Uh potentially if we do see other banks uh dealing with the same issues here. Well, I think a couple of things, one is you may want to take some short positions there on a short term basis. We don't look at any individual stocks are leveraged and inverse CTS when they're tied to the banking sector are bro broad based indices. So even with Silicon Valley or signature, that was an unfortunate situation, those are very small percentages of the broader based indices that we provide exposure to in regards to how it might affect interest rates. Uh you know, the fed right now is a little bit of in a quandary. Uh you know, the PP I help today in terms of uh maybe them being less hawkish going forward. But certainly the wild card here is them being the backstop uh for the regional banks and whether or not there's any systemic rich risk there, we're seeing a lot of people uh short term traders trading, our triple leverage uh T M F T M V which is the triple leveraged 20 plus year treasury bull and bear. And on the shorter end of the curve, the 7 to 10 year as well, triple leveraged T Y D and T Y O rates have definitely dropped precipitously the last few days as that flight to safety trade is really come and the fed next week people are trading off that potential meeting as well. Absolutely. And I do have to ask you about credit space, of course, because it is our biggest story of the morning so far. You know, obviously these two big crises coming on the back of one another, but experts are saying they're not related, this could however trigger an overall review of the banking sector. What could that mean for investors as we continue to see overhaul in the financial sector? I think investors have to be cautious in terms of what they're investing in, know what's under the hood. Uh You know, how much exposure do you have to the financials in general? And that of course, for a client is something they could discuss if they have a financial advisor to work with. In regards to us. Again, we have leveraged and inverse CTF these are short term trading day vehicles. Um you know, credit suisse is one in one of our E T s that I at least could think of offhand, which is the footsie Europe developed E U R L is a triple average bulls. So there's some banking stocks within there, but people should be cautious in terms of how much exposure they have within these financials, especially now Ed Golinski, managing director, head of sales and distribution and alternatives that direction. Thank you so much for joining us and for providing an insight into some of the biggest stories that we have this morning to find out more about how direction E T S enable you to seek profit and manage risk in all market conditions. Visit direction dot com. Before investing carefully, consider a fund's investment objectives, risks, charges and expenses contained in the prospectus at direction dot com. Please read carefully.