Trading volumes have surged in leveraged funds, options since the pandemic, data shows

• Leveraged and inverse funds reached average daily volumes of 1.41 billion in 2025, growing at a 29% compound annual rate since 2020, compared to 10% for stocks
• Options trading hit 58 million in average daily volume for 2025, up 26% year-over-year with a 16% compound annual growth rate since 2020
• The number of active leveraged funds grew 50% in 2025, the largest annual increase since 2007, with traders using these products to 'buy the dip' after market declines including during April's tariff-driven selloff

Market Summary: Surge in Leveraged Funds and Options Trading

Key Findings

Trading volumes for leveraged funds and options have experienced dramatic growth since the COVID-19 pandemic, significantly outpacing traditional stock trading, according to a new report from ETF manager Direxion.

Volume Growth Data

Leveraged and Inverse Funds:

• Expected average daily trading volume of 1.41 billion in 2025
• 130% increase from 2024
• 250% surge from 2020
• Compound annual growth rate of 29% between 2020-2025

Options Trading:

• Projected 58 million average daily volume in 2025
• 26% increase year-over-year
• More than double 2020 levels
• 16% compound annual growth rate (2020-2025)

Stock Trading Comparison:

• Only 10% annual growth rate over the same period
• Still maintains significantly larger absolute volumes

Market Developments

The number of active leveraged funds grew 50% in 2025—the largest annual increase since 2007. Approximately 80% of U.S. leveraged funds track equities. Volume and turnover records were set in April 2025 when tariff policies triggered market volatility.

Key Drivers

The surge reflects growing retail trader participation in financial markets and increased sophistication in using complex investment vehicles. Traders have adopted "dip-buying" strategies, purchasing leveraged bull funds after market declines, particularly following political announcements and policy changes.

Market Implications

Direxion CEO Douglas Yones notes demand should persist as investors use these tools for short-term rebounds following volatility. However, he emphasizes leveraged funds should remain "satellite" positions within diversified portfolios, requiring thorough research before investment due to their amplified risk profile.