Leveraged ETF Decay

The daily-reset trap

A 3× ETF promises 3× the underlying's daily return — not the cumulative. If the underlying drops 10%, then rebounds 11.1% to flat, the 3× product drops 30% then rebounds 33% — ending at 0.7 × 1.33 = 0.931, a 6.9% loss while the underlying broke even. Multi-day holds in chop almost always underperform N × underlying. The mathematical headline: drag ≈ −0.5 × N × (N−1) × σ² per period.

How to use this universe

• Decay capture: short both legs of a bull/bear pair (e.g. short TQQQ + short SQQQ) to harvest the combined drift. Borrow rates on the bear leg are usually the binding constraint.
• Premium selling: leveraged ETF options carry rich IV. Pair this with the Skew Screener + IV rank lookups on the product detail page.
• Delist risk: filter by Min AUM < $25M to surface vehicles approaching closure — common in single-stock Tradr / Leverage Shares products.

Caveats

• Universe rebuilt nightly using leverage-disclosure naming — Direxion Daily, ProShares Ultra / UltraPro, GraniteShares 2x, Tradr, T-Rex, Defiance, Leverage Shares, MicroSectors, ETRACS, and others.
• Implied AUM uses shares outstanding × last close and may overstate prospectus AUM; treat the number as relative, not absolute.
• Single-stock 1.5× / 1.25× products are included (category: mild); 4× products (SPYU) are flagged extreme.

Every active leveraged and inverse ETF/ETN we track, largest first by implied AUM. Each row links to that product's decay, IV rank and pair-trade detail.