ProShares to Launch 2x SpaceX ETF on Nasdaq

ProShares will list the Ultra SpaceX ETF (SPCF) on Nasdaq on June 12. The fund targets twice the daily return of SpaceX and is set to begin trading the day after the IPO is priced on June 11.

ProShares manages more than 115 funds and has over $90 billion in assets. SPCF joins its single-stock leveraged funds that aim for 2x daily returns on companies including Circle, Coinbase, NVIDIA, Palantir and Tesla. Michael Sapir, ProShares’ chief executive, described the product as offering traders a way to magnify a bullish view on SpaceX without borrowing on margin on IPO day.

Investor demand for the SpaceX offering reached about $250 billion in orders against a $75 billion planned size, leaving the deal roughly 3.5 to 4 times oversubscribed. Underwriting books are set to close on June 11, with pricing scheduled the same day.

Leveraged ETFs use derivatives and borrowing to deliver a multiple of an underlying asset’s daily performance. SPCF aims for twice the daily return of SpaceX. Because leveraged funds reset daily, gains or losses over longer holding periods can diverge from two times the cumulative return. The structure is intended for traders seeking short-term amplified exposure rather than long-term investors.

The ETF provides another way to trade the SpaceX listing besides buying shares directly or using margin, and is timed to coincide with IPO pricing and first-day trading, periods when volume and volatility are often concentrated. Nate Geraci, president of NovaDius Wealth Management, described the same-day leveraged launch as an early signal of how ‘wild the IPO could be’ and asked, ‘Will other ETF issuers jump in?’