2015 saw the launch of REX Shares, and its range of MicroSector ETNS arrived in 2018, offering leveraged and inverse ETNS on trading segments such as the FANG stocks, gold miners, big banks, big oil or travel stocks.
The range has USD3 billion in assets now. Scott Acheychek, CEO of REX Shares, explains that the firm was trying to capture specific micro sectors not broad-based indices. “So if someone wants to trade big tech, our product is just the big tech stocks so you get more bang for your for your desired exposure.”
The products are heavily used by short term traders and the firm often sees the entire portfolios trade within a given day, many times over.
Diversification for REX Shares is its recent launch back in relatively stable ETFs. The first is the FEPI covered call income product, based on 15 big tech stocks and selling calls on each of those stocks.
“Because the 15 big tech stocks are slightly more volatile than the overall market we can structure it to allow growth and to create high income by selling calls on these stocks as well,” Acheychek says. “We are trying to allow people to appreciate with the stock market and get outsized income.”
The product is designed to raise an income of between 20 and 25 per cent per annum or more, and as the market gets more volatile, the calls sold within the product become more valuable, acting as a risk mitigator, Acheychek says.
“Fixed income is a disaster right now and a ton of assets are going into alternative income,” he says. “We started analysing and felt we could improve on the current structures and build something a bit different and this is based on the FANG & friends stocks which people know and love so it’s very approachable and a viable alternative to some of the products that are out there.”
Other launches from REX Shares are back in their old territory but in the single stock ETF format, with the first 2x and minus 2x offerings on Tesla and Nvidia. Acheychek says: “We are going after what we believe traders want and what they want is the most leverage they can get, so we are thrilled to have the only 2x products in the market on Tesla and Nvidia.”
