Direxion files for event-contract ETFs on SpaceX KPIs, AI outcomes and El Niño
Direxion Shares ETF Trust filed two 485APOS amendments on Monday, September 21, proposing eight unlevered funds on a 75-day clock.
Direxion Shares ETF Trust asked the SEC on Monday for permission to sell eight unlevered ETFs that would pay off on event contracts, including a series whose stated subject is “U.S. economic, labor and company contractions due to artificial intelligence,” filed beside a twin written around expansion. An event contract, as both prospectuses describe the payout, typically settles at $1 if a named outcome occurs and at $0 if it does not. The same Commission has already held up other prediction-market funds over product mechanics and disclosures.
The papers are still drafts. Ticker and exchange fields are blank. The funds had not commenced operations. Each amendment checks the box for effectiveness 75 days after filing under Rule 485(a)(2). Nothing in either document changes the fees or strategies of Direxion’s listed funds.
Eight series on three subjects
Post-Effective Amendment No. 516 adds four company-KPI series: the Direxion SpaceX KPI ETF, Direxion Tesla KPI ETF, Direxion Anthropic KPI ETF and Direxion OpenAI KPI ETF. Post-Effective Amendment No. 517 adds the Direxion AI Prosperity Prediction Markets ETF, Direxion AI Doomsday Prediction Markets ETF, Direxion El Niño ETF and Direxion La Niña ETF. Rafferty Asset Management is the adviser. The trust said it then consisted of 245 series.
Each series adopts an 80% names-rule policy, with derivatives counted at notional value. That rule is what binds a fund to the thing on the label, and here the thing on the label is a probability.
The prospectuses say exposure would be obtained primarily through over-the-counter total-return swaps, and may run through a wholly owned Cayman Islands subsidiary. They name no swap counterparty and no designated contract market, including Kalshi or Polymarket. A contract priced at $0.50 is the papers’ example of an implied probability of about 50%. KPI positions would be laddered across four quarters and rolled near expiration.
What would settle the bet
The eight funds differ by the outcome they point at and by whether the paper names anything that would settle it.
That example-filings language fits Tesla, a listed issuer, and SpaceX, whose common stock trades as SPCX. It does not fit Anthropic or OpenAI. Neither company files a 10-K, 10-Q, or 8-K, and neither KPI series is conditioned on a public listing. The amendments do not name a substitute source that would settle those two funds if the companies never file those forms. They also do not name who would write an OTC total-return swap referencing SpaceX segment revenue, or Anthropic production volumes. The weather funds describe contracts on climate outcomes of a particular period; they do not name the agency, index, or measurement that would pay the dollar.
Blanks in the fee table
In the prospectus fee table for every series, management fees, other expenses, acquired-fund fees, the expense cap and both gross and net expense ratios are left as blanks. Distribution and/or service (12b-1) fees are the completed line: 0.00%. A statement of additional information filed with each amendment states an advisory fee of 0.50% of average daily net assets and an expense limitation of 0.70% through September 1, 2028, subject to stated exclusions. Those SAI figures do not fill in the prospectus table the shareholder would read first.
Not the 2x SpaceX or Tesla trade
Direxion already lists funds that magnify the stocks. Direxion Daily SpaceX Bull 2X ETF LOFF, launched June 15, held $75.2 million as of Monday and charges 0.99%. Direxion Daily TSLA Bull 2X ETF TSLL held $3.82 billion. The KPI filings are written off operating metrics, not off the common shares. SpaceX common stock, ticker SPCX, closed Monday at $151.85. Tesla already trades. Anthropic and OpenAI do not.
Direxion’s pending Daily Anthropic Bull and Bear 2X ETFs are a different document: the issuer has said those funds will not commence operations until Anthropic common stock is publicly listed. July’s Defined Income Boost funds were the firm’s other recent non-leveraged foray, using call options rather than event contracts.
Prediction-market ETFs already in SEC review
U.S. issuers have already tried to put event contracts inside an ETF wrapper. Roundhill, Bitwise and GraniteShares filed election-outcome funds in February. On May 4, Reuters reported that those launches were pushed back while the SEC sought more information on product mechanics and disclosures. On May 10, CNBC reported a delay covering 24 prediction-market ETFs. Direxion’s own risk section names insider trading and information asymmetry as principal risks of the event-contract book.
Tema’s DICE is effective at 0.75% as an equity fund of trading and event-contract companies. Tema Trading & Prediction Markets ETF DICE, which began trading the week of September 8, is the listed fund nearest this category, and it owns companies rather than contracts. As of September 17 it owned 7.75% Kalshi SPV exposure and 7.75% Polymarket SPV exposure, alongside public brokers and exchanges. It does not hold the corporate-KPI, AI-outcome, or weather contracts described in Direxion’s amendments.
Monday’s amendments start a 75-day clock under Rule 485(a)(2). A comment letter, a delay, or an amended filing can interrupt it, and the shares cannot be sold until a registration statement is effective. Direxion has not named an exchange, filled in a ticker, or issued a launch notice. The next event is whether the Commission lets that clock run, or asks for the same mechanics-and-disclosure answers it sought in May.
Frequently asked
What is an event contract?
As both prospectuses describe it, an event contract typically settles at $1 if a named outcome occurs and at $0 if it does not.
Are these funds available to buy?
No: the papers are drafts, tickers and exchanges are blank, the funds have not commenced operations, and shares cannot be sold until a registration statement is effective.
How would the funds get their exposure?
Primarily through over-the-counter total-return swaps, possibly via a wholly owned Cayman Islands subsidiary, with no counterparty or contract market named.
What do the fee tables say?
Every prospectus fee table leaves management fees, expenses and both expense ratios blank except the 12b-1 line at 0.00%, while the separate SAI states a 0.50% advisory fee.