GraniteShares’ 2x Long NVDA Daily ETF lost 67 percent due to daily rebalancing mechanics amplifying volatility decay during NVDA’s 35 percent decline.
GraniteShares 2x Long NVDA Daily ETF (NVDL) fell 67 percent from peak to trough by April 4, 2025, while NVIDIA (NVDA) declined roughly 35 percent. The discrepancy stems from daily rebalancing, which compounds losses in choppy markets by resetting exposure each night, creating path dependency that erodes value over time.
NVDL’s structure delivers two times NVDA’s daily returns but incurs 5-8 percent annual structural drag before accounting for price movements. The fund is designed for short-term tactical trades, not multi-week or multi-month holds, as volatility decay and nightly resets amplify losses during prolonged downturns.
The drawdown highlights the risks of leveraged ETFs, where sequential percentage losses and gains can leave investors significantly underwater even if the underlying asset recovers. NVDL’s mechanics, while effective for daily exposure, proved costly during NVDA’s volatile period.