Speculative investing tools have boomed in popularity since the Covid pandemic as more retail traders have entered the market, according to forthcoming data shared exclusively with CNBC.
Leveraged and inverse funds are expected to see average daily trading volumes of 1.41 billion in 2025, per a report from exchange-traded fund manager Direxion due out on Tuesday. That’s a gain of more than 130% from 2024 and 250% from 2020, the firm found.
Leveraged funds aim to use derivatives to boost the returns of an underlying asset, but they can also amplify losses. Inverse funds set out to give investors the opposite performance of an underlying asset.
Average daily options volume is projected to reach 58 million in 2025, Direxion found. This figure reflects a roughly 26% increase from the prior year and is more than double the amount seen in 2020.
“People have gotten really smart about investing and investing in complex vehicles,” Douglas Yones, Direxion’s chief executive, told CNBC in an interview.
