The Defiance Daily Target 2X Short IONQ ETF IONZ has won the unwanted distinction of one of the worst-performing ETF over the last month, as shorters of IonQ Inc. IONQ are on the wrong end of a quantum leap.
IONZ is meant to provide short negative 200% of IonQ’s daily returns, targeting short-term traders with bearish views on the quantum computing company. Rather, the fund turned out to be a cautionary tale as IonQ shares moved to all-time highs, driven by a plethora of bullish catalysts that have recharged the space.
Over the last month, IonQ surged around 88%, and IONZ plunged 78% over the same period.
See what is driving IONQ movement here.
IonQ’s Hot Streak
Within the past few months, IonQ bought Oxford Ionics and signed an agreement to buy Vector Atomic, supported by over $200 million in government contracts. Needham’s Quinn Bolton highlighted the momentum by maintaining a Buy rating and $80 price target.
Piling on to the rally, IonQ also participated in the Department of Energy’s Quantum-in-Space Collaboration. The program has the objective of speeding up commercialization of secure quantum communications, advanced navigation capabilities, and quantum sensing for space applications.
CEO Niccolo de Masi welcomed the partnership as evidence of IonQ’s increasing position in national security and space technology.
Traders Short-Circuited
The stock’s brisk advance has left IONZ bruised. Leveraged inverse ETFs such as IONZ amplify gains and losses, so the fund’s investors were struck twice as hard as IonQ rose higher.
With IonQ’s momentum score at 99.32/100 per Benzinga’s Edge rankings, a bullish MACD crossover and volume indicating strong investor demand, technicals indicate the rally has legs still.
For short sellers of IonQ via IONZ, the last month has been nothing short of merciless. While quantum computing gets both technological and political traction, the ETF’s performance provides a painful reminder: in this space, shorting is being annihilated quicker than a qubit in a noisy lab.
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