$SOXS 24 hours and it has dropped another 10.339%, with the price smashed down to 46.57. But the funding rate is 0. This combination is interesting: after such a sharp drop, shorts surprisingly don’t need to pay anything, which suggests short-selling pressure is pretty steady and no one is rushing to close positions.
The semiconductor sector has been bloodied, and SOXS, as an inverse ETF, should theoretically be up. Instead, it’s plunging sharply. That can only mean the market thinks semiconductors have fallen too far, or at least that leveraged longs in SOXS are getting steamrolled. A funding rate of zero means that the cost balance between longs and shorts on the exchange is temporarily even; neither side is bleeding to hold positions. This kind of calm often builds up to the next one-sided move.
My view is that going long SOXS here is extremely risky. The panic selling in semiconductors may be nearing its end, but SOXS’s own liquidity or hedging mechanism may have broken down, causing it to decouple from the underlying. This is not something retail traders should play with.
The strongest counterargument: if Micron and Nvidia both report ugly earnings again and semiconductors crash a second time, SOXS would rebound violently. But earnings are future events, and the current data does not support that logic.
Second-order impact: leveraged longs seeing this kind of collapse and zero funding rate may hesitate to buy the dip; meanwhile, shorts are in no rush to close, so the price may keep grinding lower while looking for support. Liquidity will flow out of this high-volatility ETF and into more certain names.
I wouldn’t touch it.
Trading tag: #TradFi #链上美股 #SOXS
Where do you think this reasoning is most likely to be wrong?
The semiconductor sector has been bloodied, and SOXS, as an inverse ETF, should theoretically be up. Instead, it’s plunging sharply. That can only mean the market thinks semiconductors have fallen too far, or at least that leveraged longs in SOXS are getting steamrolled. A funding rate of zero means that the cost balance between longs and shorts on the exchange is temporarily even; neither side is bleeding to hold positions. This kind of calm often builds up to the next one-sided move.
My view is that going long SOXS here is extremely risky. The panic selling in semiconductors may be nearing its end, but SOXS’s own liquidity or hedging mechanism may have broken down, causing it to decouple from the underlying. This is not something retail traders should play with.
The strongest counterargument: if Micron and Nvidia both report ugly earnings again and semiconductors crash a second time, SOXS would rebound violently. But earnings are future events, and the current data does not support that logic.
Second-order impact: leveraged longs seeing this kind of collapse and zero funding rate may hesitate to buy the dip; meanwhile, shorts are in no rush to close, so the price may keep grinding lower while looking for support. Liquidity will flow out of this high-volatility ETF and into more certain names.
I wouldn’t touch it.
Trading tag: #TradFi #链上美股 #SOXS
Where do you think this reasoning is most likely to be wrong?