Ford. Trade It’s Like It’s Stolen? FRDU/FRDD

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. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in F.

Ford's trademarked phrase “Built Ford Tough” is more than a slogan; it encapsulates the ideology of Ford Motor Company (NYSE: F) to build vehicles that are durable, reliable and sustainable. The automotive vehicle landscape has changed materially in the last few years, and Ford is taking the necessary steps to align their ideology with the innovations of today.

At present, several developments are impacting Ford, potentially creating trading opportunities for those who can react swiftly, regardless of their assessment of whether the impact on the stock will be positive or negative. The Direxion Daily F Bull 2X ETF (Ticker: FRDU) and Daily F Bear 1X ETF (Ticker: FRDD) are designed for traders wanting to attempt to capitalize on these fast-moving trends.

Short-Term Catalysts Impacting F:

Launching a New EV Platform

Ford recently announced the launch of a new electric vehicle (EV) platform, investing approximately $5 billion to create a new suite of affordable and high-quality vehicles. While this new initiative is not Ford’s first foray into EVs, the firm will be utilizing its new Ford Universal EV Platform and Ford Universal EV Production System to design and assemble the newly designed EVs. The announcement of this new project comes at an interesting time for the firm, given its recently reported second-quarter performance and the flat sales performance in electric vehicles as of July 2025.

Headwinds Affecting the EV Space

Recent research published by S&P Global Automotive Insight suggests that EV sales may be slowing down due to increased competition within the category. As mentioned in the memo, over the next 18 months, 36 new EV models are expected to launch in the U.S. Another significant factor affecting EV sales in the near future is the phasing out of several tax provisions related to electric vehicles in September 2025. While interested EV consumers may purchase a vehicle before the tax credit ends, thus boosting EV sales in the short term, in the long run, the oversaturation within the category will be something Ford will have to contend with.

China and Rare Earth Elements

China’s dominant control over access to and distribution of rare earth elements, which are essential for EV development, continues to be an ever-present threat to Ford and other car manufacturers. Against the backdrop of current trade tensions between the U.S. and China, the latter has leveraged its control, implementing a revised licensing process for the export of rare earth elements, officially aimed at enhancing regulatory oversight and ensuring sustainable practices. These new regulations impacted auto-markers, with Ford even having to temporarily shut down its production line in Chicago during June 2025.

To address the adverse externalities of China’s new licensing process, Washington and Beijing have negotiated a temporary six-month license simplification process that removes red tape for U.S. automakers. As of early July 2025, China was approving licenses for the automotive industry.

Gaining Market Exposure With FRDU and FRDD

For traders seeking exposure to these short-term catalysts, the Direxion Daily F Bull 2X and Bear 1X ETFs seek daily investment results, before fees and expenses, of 200%, and -100%, respectively, of the common shares of Ford Motor Company (NYSE: F). These Single Stock Leveraged & Inverse ETFs allow traders to attempt to capitalize on movements in Ford’s stock.

For those who can actively manage risk, FRDU and FRDD offer a way to attempt to take advantage of rapid shifts that impact the firm’s prospects. As always, leveraged and inverse ETFs are best used for short-term trades after thorough research, should only be held for a day and also require close monitoring.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with F and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with F and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to F is impacted by F’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to F at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to F increases on days when F is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with F and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to F is impacted by F’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to F at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to F increases on days when F is volatile near the close of the trading day.

Ford Motor Company Investing Risk – F faces risks associated with: defects in manufacturing and the related costs of recalls and repairs; reliance on suppliers; potential for labor disputes; unrealized benefits may never be realized; failure to develop products to grow business; ability to maintain a competitive cost structure; ability to attract and retain talent; among other risks.

Consumer Discretionary Sector Risk — Companies in the consumer discretionary sector are tied closely to the performance of the overall domestic and international economy, including the functioning of the global supply chain, interest rates, competition and consumer confidence.

Automotive Companies Risk — The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. Automotive companies can be significantly affected by labor relations and fluctuating component prices.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Concentration Risk, Market Risk, Non-Affiliation Risk, Security Volatility Risk and Cash Transaction Risk. Additionally, for the Direxion Daily F Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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