If a stock goes up 10% and then falls 9.09%, it is back where it started. A fund that does 2x the daily move ends that s…
If a stock goes up 10% and then falls 9.09%, it is back where it started. A fund that does 2x the daily move ends that same stretch down about 1.8%. Leveraged funds lose a little every time a stock swings back and forth, so they can stay down even after the stock recovers.
Know the difference before you hold on to leverage names like $SOXL $TSLL $NVDL longer than a day or two.The copyright of this article belongs to the original author/organization.
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