The ASML Disclosure Impact
ASML Holding N.V.’s unintended premature earnings report release dealt a blow to the tech sector, resulting in a 1% decrease in the Nasdaq index. The revelation of a gloomy revision to ASML’s 2025 net sales outlook rattled the computer chip segment. It highlighted a more sluggish recovery than anticipated, with AI demand standing out amidst caution among customers.
Options Market Response
Following ASML’s disclosure, institutional investors flooded the options market with bearish positions on ASML stock. Put options with various expiry dates emerged as a popular choice among market participants, signaling a negative sentiment toward the company’s future trajectory.
Direxion’s Leveraged ETFs: SOXL and SOXS
Direxion’s leveraged ETFs, particularly the SOXL and SOXS funds, gained attention amid the heightened volatility in the tech sector. SOXL, designed for bullish traders, and SOXS, tailored for bearish sentiments, mirror the NYSE Semiconductor Index’s daily performance with 3X leverage.
Examination of SOXL and SOXS Performance
Despite the positive performance of the SOXL ETF year-to-date, extreme leverage led to modest gains. A significant drop post-ASML’s disclosure saw SOXL’s unit price dip below the 50-day moving average. On the other hand, the SOXS ETF, facing losses in a bullish tech market, experienced an 18% surge following the unexpected disclosure, providing a glimmer of hope.