How daily reset changes leveraged ETF returns.
Enter day-by-day benchmark returns and watch how a leveraged ETF resets and compounds from each day's new value.
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.
Build a day-by-day example
Enter each day's benchmark return. The default shows the classic +10% then -10% case.
3x ETF after 2 day(s)
$91.00
Benchmark $99.00
Key takeaway
The benchmark is down 1.00%, but the 3x daily ETF is down 9.00% — because each day resets and compounds from the new value, not from the starting price.
Your results
Benchmark total return
3x ETF total return
Naive "3× benchmark"
Why the long-term result isn't simply leverage × benchmark return
Daily reset, step by step
| Day | Benchmark daily | Benchmark value | Fund daily | 3x ETF value |
|---|---|---|---|---|
| 1 | +10.00% | $110.00 | +30.00% | $130.00 |
| 2 | -10.00% | $99.00 | -30.00% | $91.00 |
Example calculation
The classic two-day example with 3x leverage:
- Benchmark: 100 → 110 (+10%) → 99 (-10%) ⇒ down about 1%
- 3x daily ETF: 100 → 130 (+30%) → 91 (-30%) ⇒ down about 9%
The benchmark is down ~1%, but the 3x daily ETF is down ~9% because each day resets and compounds from the new value rather than the original price.
How daily reset works in leveraged ETFs
A leveraged ETF targets a multiple of its index's return each day. At the end of every trading day the fund effectively "resets": the next day's multiple is applied to the fund's new value, not to the original starting value. This daily reset is the single most important thing to understand about how these products behave.
Why long-term results aren't leverage × benchmark return
Because the multiple applies to daily returns and compounds from a changing base, the long-run result is path-dependent. Two days of +10% then -10% leave the benchmark down 1% but a 3x fund down roughly 9%. Over many days, the gap between "3x the daily move" and "3x the total return" can grow large in either direction.
Build your own example
Use the calculator above to enter any sequence of daily returns and add as many days as you like. Watch how the fund's value and its realized daily return evolve, and compare the benchmark total return with the leveraged total return. Then see the cumulative effect over longer, noisier paths in the decay calculator and the 2x vs 3x simulator.
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Frequently asked questions
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.