$XL2CSOPHYNIX(07709.HK)

"Volatility decay is the core reason for leveraged ETFs' returns deviating from expected performance."

If SK Hynix experiences high volatility during an uptrend (alternating between sharp rises and falls), even if it ultimately rises by 15%, the 2x ETF may deliver a return lower than the theoretical 2x due to the daily rebalancing mechanism of increasing positions on rises and reducing them on falls.

The copyright of this article belongs to the original author/organization.

The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.