Direxion Semiconductor Bear 3X ETF

• A blockchain token designed to track the price of Direxion Daily Semiconductor Bear 3X Shares (NYSE Arca: SOXS), a leveraged exchange-traded fund.

• It is not a fund unit. Holding the token does not make you a shareholder of the fund and confers no rights against the fund or its manager.

• The underlying is a daily-objective leveraged product, so this token inherits that structure and is unsuitable for holding over long periods.

• Issuer: Direxion

• Objective: 3x the inverse daily return of a semiconductor index

• Listed on: NYSE Arca (SOXS)

• Rebalancing: Daily

• Category: Leveraged inverse sector fund

• SOXS seeks three times the INVERSE of the daily return of a semiconductor index, meaning it is designed to rise when the sector falls.

• Both the inverse structure and the daily leverage reset cause it to lose value over extended holding periods in a rising or choppy market.

• It is a hedging and short-term trading instrument only.

• The fund takes short exposure mainly through swaps.

• Leverage resets each trading day.

• It gains when chip stocks fall.

• You get price exposure to the underlying instrument.

• You do not get shareholder voting rights.

• Dividend or distribution treatment depends on the issuer's structure and is often not passed through.

• You take on issuer and custodian risk in addition to the price risk of the underlying.

Pros:

• It can hedge a short-term fall.

• It needs no short-selling account.

• It is highly liquid.

Cons:

• Losses are amplified when chips rise.

• Daily reset causes decay over time.

• Long-term holding usually loses value.

• Leverage decay: the underlying resets its leverage daily, so holding for more than a day produces returns that differ from the stated multiple, usually unfavourably in volatile markets.

• Loss can be rapid and severe. A three-times leveraged product can lose the large majority of its value in a short period.

• Counterparty risk: if the issuer or custodian fails, the backing may not be recoverable.

• Tracking risk: the token price can diverge from the underlying, particularly outside US market hours when the underlying does not trade.

• Liquidity risk: on-chain liquidity is thinner than the underlying market, so spreads can widen sharply.

• Regulatory risk: India does not yet have a settled framework for tokenised equities, and tax treatment remains unclear.

• Price risk specific to the underlying instrument.