Two leveraged ETFs designed to double the daily return of Nvidia stock show divergent performance based on liquidity and reset mechanisms [1, 2].

These funds allow investors to gain amplified exposure to the semiconductor giant without holding the underlying shares directly. However, the difference in fund structure and market liquidity can lead to vastly different outcomes during periods of high volatility.

GraniteShares 2x Long NVDA Daily ETF (NVDL) and T-Rex 2x Long NVIDIA Daily Target ETF (NVDX) both target double the daily performance of Nvidia. The appeal of NVDL is that it provides two dollars of exposure for every dollar invested, recalibrated each morning [3].

Over a one-year period, NVDL outpaced NVDX by nine percentage points [2]. This performance gap was attributed to deeper liquidity, tighter bid-ask spreads, and more efficient swap pricing [2].

Despite the long-term outperformance of NVDL over NVDX, both funds remain susceptible to volatility decay. In one specific month, both funds lost roughly 15% while the underlying Nvidia stock fell only six percent [2].

The risks of these daily-reset instruments became more evident during a drawdown in early 2025. During that period, Nvidia fell roughly 35% [2]. In contrast, NVDL saw a much steeper decline, losing between 67% [2] and 68% [3] from peak to trough.

Analysts said the daily reset mechanism is largely responsible for these losses. Because the funds recalibrate daily, the path dependency of the stock price can erode the value of the ETF even if the underlying stock eventually recovers.

“NVDL outpaced NVDX by nine percentage points over the past year”

The disparity between Nvidia's stock performance and the returns of 2x leveraged ETFs highlights the danger of 'volatility decay.' Because these funds reset daily, they are designed for short-term trading rather than long-term holding. Investors using these instruments to 'press the bet' face a mathematical erosion of capital during choppy markets, where the ETF can lose significantly more than double the percentage of the underlying asset's decline.