---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/26283563.md"
description: "It has been found that everyone has questions about why there is wear and tear with triple leverage.For example, the Nasdaq is in a long bull market, but TQQQ has not outperformed QQQ over three years; similarly, this year is a bull market for semiconductors, but SOXL has not outperformed SOXX over one year.Let's do a simple calculation to understand.Day 1, Day 2, Day 3, Day 4, Day 5, Day 6One times:         +10%      -5%      +8%      -10%      +5%     -8%Three times long:     +30%     -15%      +24%     -30%    +15%     -24%Three times short:     -30%     +15%      -24%     +30%    -15%     +24%ReturnsOne times 100*1.1*0.95*1.08*0.9*1.05*0.92=98.12Three times long 100*1.3*0.85*1.24*0.7*1.15*0.76=83.83Three times short 100*0.7*1.15*0.76*1.3*0.85*1.24=83.83Conclusion: As long as the tracked asset does not experience a prolonged one-sided rise or fall, both three times long and three times short are likely to underperform the tracked asset in the end.$Invesco QQQ Trust(QQQ.US)$iShares Semiconductor ETF(SOXX.US)$Proshares UltraPro QQQ(TQQQ.US)"
datetime: "2024-12-25T07:41:16.000Z"
locales:
  - [en](https://longbridge.com/en/topics/26283563.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/26283563.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/26283563.md)
author: "[资深韭菜](https://longbridge.com/en/profiles/91.md)"
---

# It has been found that everyone has questions abou…


### Related Stocks

- [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md)
- [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md)
- [QQQ.US](https://longbridge.com/en/quote/QQQ.US.md)
- [SQQQ.US](https://longbridge.com/en/quote/SQQQ.US.md)
- [TQQQ.US](https://longbridge.com/en/quote/TQQQ.US.md)

## Comments (29)

- **HQQH · 2024-12-27T15:54:28.000Z · 👍 1**: Your example is incorrect. The total percentage fluctuation adds up to 0, but in a bull market, like the Nasdaq index consistently rising amid fluctuations over the long term, the total return would definitely be higher than a single multiple of the Nasdaq index.
- **薛定谔的野猫 · 2024-12-26T23:28:31.000Z**: What about double? How's the loss?
  - **Silas苦于学金融** (2024-12-27T08:50:45.000Z): Same logic, more loss than normal, less loss than triple
- **轮蹲大屎馆 · 2024-12-26T15:36:41.000Z**: Long-term holding, compound interest doubles
- **图图0129 · 2024-12-26T06:49:27.000Z**: The issue with triple leverage isn't just volatility—you get less upside when it rises but more downside when it falls. Over time, the drag becomes significant.
- **让世界感受痛苦吧！！ · 2024-12-26T03:59:49.000Z**: But in the long run, the U.S. stock index is a long-term upward trend.
- **RH哥哥 · 2024-12-25T12:59:05.000Z · 👍 1**: I want to ask, if the underlying stock drops 50%, what will happen to the 3x leveraged long position? Will it get liquidated?
- **空空郎君 · 2024-12-25T09:17:12.000Z · 👍 5**: Leveraged ETFs are suitable for long-term holding, not for short-term speculation. If you extend your holding period to 10 or 20 years, leveraged ETFs will definitely outperform!
  - **贾民** (2024-12-26T00:11:30.000Z): That's because US stocks have been rising for over a decade. If it were here, it would be absolutely amazing.
  - **空空郎君** (2024-12-26T00:36:36.000Z): So when it comes to investing, you need to first choose the financial market, then select your investment target.
  - **Silas苦于学金融** (2024-12-26T00:48:03.000Z): Holding many stocks for the long term can outperform the market, and the so-called complete victory is just based on the performance of the original underlying stocks. This is referring to the fact th
- **复利魔方3650 · 2024-12-25T08:57:46.000Z**: I got burned by the 3x leveraged crude oil ETN before...😵
  - **RH哥哥** (2024-12-26T02:31:22.000Z): Big shot, can you explain this? I want to ask, if the underlying stock drops 50%, what would happen to the 3x leveraged long position? Would it get liquidated?@复利魔方3650
  - **复利魔方3650** (2024-12-26T02:35:47.000Z): It depends on the time cycle. If the underlying stock drops more than 33% in one day, the 3x leveraged long ETF will be wiped out (multiplied by three).If it's a prolonged slow decline, the situation 
  - **RH哥哥** (2024-12-26T02:54:46.000Z): I just want to ask about a single day, because leveraged ETFs are designed to track the daily price movement multiples of the underlying stock. So if the underlying stock drops 50% in one day, would I
- **赚总 · 2024-12-25T08:34:43.000Z · 👍 2**: If you're using short-term leverage, there's no need to go for 2x or 3x. It's more comfortable to switch to out-of-the-money options.
- **Zchill · 2024-12-25T08:34:28.000Z**: But the essence of the stock market is volatility. Even a long bull market is composed of countless upward fluctuations. Therefore, leveraged ETFs cannot be held for the long term and are only suitable for short-term trading.
- **AlphaWey · 2024-12-25T08:24:25.000Z**: Yes, so ETFs are for quantitative swing trading, not long-term holding;
- **Silas苦于学金融 · 2024-12-25T08:11:15.000Z · 👍 12**: To add on, this is actually the oscillation loss. Leverage incurs very high losses in oscillating markets. Leverage is suitable for one-way trends, meaning continuous leveraged long positions in a major bull market and continuous leveraged short positions in a major bear market. In prolonged one-way
  - **资深韭菜** (2024-12-25T08:13:48.000Z): Actually, triple leverage just amplifies the most classic stock price fluctuation problem.This classic problem is: if you lose 10% on the first day and gain 10% on the second day, do you end up losing
  - **Silas苦于学金融** (2024-12-25T08:34:12.000Z): If it's 100 yuan, whether it first rises by 10% and then falls by 10%, or first falls by 10% and then rises by 10%, the result is a loss, dropping to 99 yuan. Equal percentage gains and losses always 
- **Silas苦于学金融 · 2024-12-25T07:59:18.000Z · 👍 1**: Hahaha, flashback to the finance class