MicroSectors Travel -3x Inverse Leveraged ETN (FLYD)

On our desk, looking at FLYD's AUM sitting at roughly $4.4M to $8M with a staggering bid-ask spread of nearly 12%, executing anything beyond a trivial retail trade is practically prohibitive. The structural costs completely erode short-term tactical advantages, making liquidity risk the dominant factor here.

From a market sentiment perspective, trying to hold an inverse product tracking the MerQube MicroSectors U.S. Travel Index after consecutive annual gains in 2023, 2024, and 2025 is fighting a powerful secular tide. The market sentiment is explicitly punitive toward inverse holders who underestimate multi-year compounding trends.

As a quant evaluating the portfolio risk score of 307—categorized as Extreme—the math is unforgiving. A 3-year maximum drawdown of -94.1% from peak to valley, alongside a beta of -3.92 to -4.22, demonstrates that daily-reset volatility drag will consistently eat away at capital regardless of short-term bounces.

Analyzing the expense ratio and total holding costs, while the headline figure is 0.95%, the true all-in annual hold cost is closer to 7% to 10% once financing charges and volatility drag are factored in. This makes multi-week holding periods a losing proposition for any unhedged participant.

From where I sit managing tactical risk, the fact that the underlying index gained +26.44% in 2023, +24.09% in 2024, and +17.35% in 2025 spells absolute disaster for a -3x inverse note like FLYD. Compounding daily losses in a persistent bull market have dragged the fund down 97.15% from its all-time high of $2,800.