SLStockLeo
Leveraged ETF

Compare 1x, 2x, and 3x ETF paths over a market.

Pick a market scenario and compare hypothetical 1x, 2x, and 3x (and optional inverse) ending values, total returns, and max drawdowns.

Run the 2x vs 3x simulator See an example
Daily-reset math Educational only

Educational only. Leveraged and inverse ETFs are complex products that usually target daily returns, not long-term returns. Results over longer periods can differ significantly from the stated 2x, 3x, or inverse multiple. StockLeo is educational only and does not provide investment, tax, legal, or financial advice.

Example calculation

Pick the crash then recovery scenario (-8%, -6%, -4%, +5%, +6%, +4%). Even though the benchmark claws back much of the drop, the 3x path often ends well below the 2x and 1x paths — the deeper drawdown early on is hard to recover from, and the bigger max drawdown shows the risk.

Switch to the smooth uptrend scenario and the ranking can flip: with steady gains, more leverage compounds in your favor. The lesson: the path matters, and more leverage is not simply more return.

How the 2x vs 3x ETF simulator works

This simulator runs the same daily-reset math across 1x, 2x, and 3x (and optional inverse) multiples over a chosen market path. You can select a deterministic preset scenario — smooth, choppy, crash, grind down, or volatile recovery — or define a custom path with an expected daily return (drift) and daily volatility. It then reports ending values, total returns, and maximum drawdowns for each multiple.

Why we use deterministic scenarios

For clarity and reproducibility, the MVP uses fixed, deterministic return paths rather than random Monte Carlo simulations. That keeps results fast, stable, and shareable: the same inputs always produce the same chart, so you can compare scenarios cleanly and link to a specific setup.

Reading the comparison

Compare not just the ending values but the max drawdown of each path. Higher leverage usually means a much larger drawdown, and — per the recovery math — a bigger drawdown needs a disproportionately larger gain to recover. For the underlying mechanics, see the daily reset calculator and decay calculator.

Keep going — related calculators

Answer your next investing question in under a minute.

Leveraged ETF

Why is my 3x ETF down when the index is flat?

See how daily compounding can make a 2x or 3x ETF differ from simply multiplying the benchmark's return.

Daily compounding • Volatility decay • 2x/3x/inverse

Simulate leveraged ETF decayUnder 60 seconds
Leveraged ETF

What does 'daily reset' actually mean?

Walk through daily reset step by step and see why long-term results aren't just leverage × benchmark return.

Day 1 +10%, Day 2 -10% • 3x → -9%

See daily reset exampleUnder 60 seconds
Leveraged ETF

How much do I need to gain just to break even?

A 50% loss needs a 100% gain to break even. See recovery math for any loss, amplified by leverage.

Break-even gain • Recovery table • Drawdown math

Calculate recovery mathUnder 60 seconds

Frequently asked questions

It depends entirely on the path of returns, and neither is 'better' as a general rule. In steady uptrends more leverage can compound favorably; in volatile or falling markets 3x can lose far more and suffer deeper drawdowns. This simulator lets you compare scenarios, but it does not recommend any leverage level or product.

Leveraged & inverse ETF risk — educational use only

Leveraged and inverse ETFs are complex products that usually target daily returns, not long-term returns. Results over longer periods can differ significantly from the stated 2x, 3x, or inverse multiple. StockLeo is educational only and does not provide investment, tax, legal, or financial advice.

This tool does not recommend buying, selling, or holding any fund, does not rank products, and uses hypothetical return paths — not live market data. Results are illustrative estimates, not exact figures.