Question · ETFs
Direxion Daily Small Cap Bear vs SRTY: Picking a -3x Fund
The Direxion Daily Small Cap Bear 3X ETF, ticker TZA, has a near twin at ProShares called SRTY. Both aim for three times the opposite of the Russell 2000's daily move, so the choice comes down to how each is built and how well it trades at your size.
Short answer
TZA, from Direxion, and SRTY, from ProShares, both seek -3x the Russell 2000's return for a single day and reach it mainly through swaps on the index. Their objectives match. Choose on what you can see the day you trade: the bid-ask spread and volume at your order size, the holdings file and each sponsor's risk documents.
Put an order ticket for TZA next to one for SRTY and they read almost the same. Both are buys. Both bet on small caps falling today. Each sponsor states the target in close to identical words, so a quick look at the fund pages suggests the choice barely matters, and for the exposure itself that is nearly right, while for the cost of getting in and out, the holdings behind each fund and the warnings in each prospectus it is less right than it looks.
What do TZA and SRTY have in common?
Details below are from Direxion’s and ProShares’ fund pages, fact sheets and holdings files. All are as of October 2026.
| TZA | SRTY | |
|---|---|---|
| Fund | Direxion Daily Small Cap Bear 3X ETF | ProShares UltraPro Short Russell2000 |
| Sponsor | Direxion (adviser: Rafferty Asset Management) | ProShares |
| Benchmark | Russell 2000 Index | Russell 2000 Index |
| Daily target | -300% | -3x |
| Inception (per sponsor) | Nov 5, 2008 | Feb 9, 2010 |
| Main holdings | Russell 2000 swaps, cash in money market and Treasury cash funds | Russell 2000 swaps with several banks, E-mini Russell 2000 futures, a money market fund |
The Russell 2000 tracks about 2,000 smaller US companies, the lower end of the Russell 3000 by market value, and both funds take the opposite side of that index at three times the day’s move. Both reset each evening.
So both drift the same way over longer holds. A -3x fund held for a week is compounding five separate daily targets, each applied to a new starting value, and the result can sit well away from three times the index’s weekly move in either direction; volatility decay sets out that arithmetic. The drift comes with the daily reset, and no sponsor can remove it.
Do they follow the same version of the index?
As far as the documents show, yes. Direxion’s fact sheet gives RU20INTR as the Bloomberg symbol for TZA’s benchmark. ProShares’ fact sheet for SRTY reports the index under the same code. That code belongs to the Russell 2000’s total-return series.
ProShares adds a detail about its derivatives. They are priced to include the index’s yield and pay no dividend income themselves, so any distribution SRTY makes need not resemble what the index’s companies pay. Check each sponsor’s distribution history before assuming either fund pays anything.
How is each fund built?
The holdings files differ more than the objectives. Direxion’s file for TZA, dated October 26, 2026, lists swaps on the Russell 2000 carrying negative values, which is the short side of the bet, plus cash held in money market and Treasury cash management funds. ProShares’ list for SRTY, dated October 23, 2026, shows index swaps spread across a group of large banks, a short E-mini Russell 2000 futures position and shares of a money market fund.
A swap is a private contract with a bank. If the bank fails to pay, the fund takes the loss. Both sponsors list counterparty risk. Futures trade on an exchange and settle through a clearinghouse every day. SRTY’s futures leg spreads that risk differently. The mix changes often. Read the file on the day you trade.
How does each one rebalance?
ProShares’ summary prospectus says SRTY seeks to rebalance its portfolio each day so its exposure matches the Daily Target, while Direxion warns that TZA is unlikely to be exactly on target at each day’s end and that a miss is more likely when the index swings hard near the close. The mechanics are identical for any -3x fund. After an up day the fund must shrink its short. After a down day it must add to it.
Geared funds chase the day’s move. They buy after rallies and sell after drops, near the close. On a choppy run of days that habit locks in losses, because the fund keeps cutting its short just before a fall and adding to it just before a bounce. TZA and SRTY carry this equally.
Which liquidity checks matter?
You cross the spread going in and again coming out. On a position held for hours, the gap between bid and ask can eat a real share of the move you are trading, and it differs between the funds and from one hour to the next.
- Look at the live bid and ask when you plan to trade. Note the size on each side.
- Check volume over recent sessions and so far today.
- Compare the market price with net asset value. ProShares’ page shows a 30-day median bid-ask spread and a premium or discount view. Direxion’s shows daily volume and a premium/discount tool.
- Use limit orders.
- Quotes are often wider in the first minutes after the open.
That gap is small against a big day. On a quiet day it may be most of your edge. Measure the fund’s usual daily range with its average true range and set the spread against it.
How do you choose between TZA and SRTY?
Start from the order you plan to place. If it is small next to the shares showing at the bid and ask, the two are close to interchangeable and the tighter quote at that moment wins. If it is large, favor heavier volume and deeper quotes. Split the order and work it with limits.
If you hedge with options, check what your broker lists. ProShares’ page says SRTY has listed options. Confirm the chain for either fund before planning around it.
If you mean to hold for more than a session, the choice of fund matters less than the choice of holding period, and the sizing matters most of all. A one-day jump in small caps hits both funds alike, so size against the worst rally you can picture, a step worked through in the risk checklist for TZA, with the position size calculator handling the division. For -1x and -2x small-cap bears and the other index families, see the inverse ETF list.
Read both prospectuses once, slowly. ProShares and Direxion each warn that a holder can lose the whole investment in a single day. Same bet, different plumbing.
Questions traders ask next
Why do TZA and SRTY trade at such different share prices?
Each fund started at its own price and has had its own history of splits. Direxion lists a reverse split of TZA among its operational updates, and a reverse split cuts the share count and lifts the price without changing what a holding is worth. Compare the two by percentage moves and spreads, never by the price of a share.
What is the bull version of TZA?
TNA, the Direxion Daily Small Cap Bull 3X ETF. It seeks 300% of the Russell 2000's daily return, sits on the same Direxion fund page as TZA, and shares its inception date of November 5, 2008. Holding TNA and TZA at once would cancel most of the exposure while paying both funds' costs.
Does SRTY own any small-cap stocks?
Not in the holdings ProShares published for October 23, 2026, which list Russell 2000 swaps, short positions in E-mini futures on the index, and money market fund shares. The fund's documents allow it to hold equity securities as well as derivatives, so the mix can change. TZA's file for October 26, 2026 likewise shows swaps and cash with no stocks.