widestrides

Why Leveraged ETFs Are Bound to Deteriorate

But wouldn't ANY volatile stock be subject to the same "decay?" If a biotech stock goes up 10% one day and down 10% the next, it also is not back to even. It has decayed 1%.

So it is the volatility that creates the danger, and true these leveraged ETFs are leveraged by design, but they aren't necessarily volatile. True, they have been this past year, but this has been a volatile year and a "perfect" storm to decay these ETFs. But if they trend your way or if you "rebalance" them yourself, you can take the decay out of them.

GL