Can leveraged ETFs get your rich?
What are leveraged ETFs? Should they be part of your portfolio? This article will help you understand if you should really be using leveraged ETFs or not.
9/24/20252 min read
I, Siddharth Lunawat, believe you should buy leveraged ETFs!
PTIR -> 52-week return is 1200.08% (leveraged Palantir)
GDXU -> 52% return is 282.31% (leveraged Gold Mining Companies)
These ETFs and many others are crushing the market but what are they?
They are specialized investment funds that use financial derivatives (like swaps, futures, and options) and debt to magnify the daily returns of the security they track.
As an example a 2x leveraged ETF (e.g. SSO) is designed to rise about 2% if the index it tracks rises 1% in a single day. A 3x leveraged ETF will similarly rise 3%. If the underlying security drops, then you lose that much more. These ETF's "reset" daily which can overtime lead to results that are different than what actually happens to the underlying security. It's not as simple as multiplying.
These ETFs are riskier because they magnify losses but also have volatility decay. The ETFs reset daily so in sideways or choppy markets their value can erode. For example, a 3x ETF might lose money over time even if the security stays flat.
Some common examples of leveraged ETFs:
TQQQ - 3x leveraged Nasdaq-100
UPRO - 3x leveraged S&P500
SOXL - 3x leveraged semiconductor index
FAS - 3x leveraged financial sector
You can find leveraged ETFs for pretty much anything. Country specific ones, sector specific, even company specific.
The big question is should you do it?
I would do it in small amounts. Amounts you are comfortable with losing. This is your YOLO money. This should be under 1% of your portfolio. The returns always look great until you lose. As of this date MSOX, which leverages US Cannabis ETF has lost 84.57% in the last 52 weeks. That means if you had $100 invested you would now have only $15.43 left. Such a massive drop is very hard to recover from. Even a broader index tracker such as TQQQ is subject to these risks. In April of 2025 TQQQ lost over 57% of its value whereas QQQ only lost 22.88%.
The final comment: buy a broad array of leveraged ETFs, not just one. Diversify your risk and also keep all of this as a very small percentage of your portfolio. Let this YOLO money make you money but me comfortable with losing it. If you win, then great buy yourself a treat but don't do this with your retirement money.
ALSO DISCUSS WITH A QUALIFIED FINANCIAL ADVISOR BEFORE MAKING ANY DECISIONS.
List of top 10 ETFs as of this date:
Lastly if you are new to investing and looking to understand how to get started here is an article for you:
Trading Strategies for Beginners: https://siddharthlunawat.com/trading-strategies-for-beginners
If you have a little bit of experience then here is an article on how to beat the S&P500: https://siddharthlunawat.com/how-to-beat-the-sandp-500
I, Siddharth Lunawat, believe you should buy leveraged ETFs!
PTIR -> 52-week return is 1200.08% (leveraged Palantir)
GDXU -> 52% return is 282.31% (leveraged Gold Mining Companies)
These ETFs and many others are crushing the market but what are they?
They are specialized investment funds that use financial derivatives (like swaps, futures, and options) and debt to magnify the daily returns of the security they track.
As an example a 2x leveraged ETF (e.g. SSO) is designed to rise about 2% if the index it tracks rises 1% in a single day. A 3x leveraged ETF will similarly rise 3%. If the underlying security drops, then you lose that much more. These ETF's "reset" daily which can overtime lead to results that are different than what actually happens to the underlying security. It's not as simple as multiplying.
These ETFs are riskier because they magnify losses but also have volatility decay. The ETFs reset daily so in sideways or choppy markets their value can erode. For example, a 3x ETF might lose money over time even if the security stays flat.
Some common examples of leveraged ETFs:
TQQQ - 3x leveraged Nasdaq-100
UPRO - 3x leveraged S&P500
SOXL - 3x leveraged semiconductor index
FAS - 3x leveraged financial sector
You can find leveraged ETFs for pretty much anything. Country specific ones, sector specific, even company specific.
The big question is should you do it?
I would do it in small amounts. Amounts you are comfortable with losing. This is your YOLO money. This should be under 1% of your portfolio. The returns always look great until you lose. As of this date MSOX, which leverages US Cannabis ETF has lost 84.57% in the last 52 weeks. That means if you had $100 invested you would now have only $15.43 left. Such a massive drop is very hard to recover from. Even a broader index tracker such as TQQQ is subject to these risks. In April of 2025 TQQQ lost over 57% of its value whereas QQQ only lost 22.88%.
The final comment: buy a broad array of leveraged ETFs, not just one. Diversify your risk and also keep all of this as a very small percentage of your portfolio. Let this YOLO money make you money but me comfortable with losing it. If you win, then great buy yourself a treat but don't do this with your retirement money.
ALSO DISCUSS WITH A QUALIFIED FINANCIAL ADVISOR BEFORE MAKING ANY DECISIONS.
List of top 10 ETFs as of this date:
Lastly if you are new to investing and looking to understand how to get started here is an article for you:
Trading Strategies for Beginners: https://siddharthlunawat.com/trading-strategies-for-beginners
If you have a little bit of experience then here is an article on how to beat the S&P500: https://siddharthlunawat.com/how-to-beat-the-sandp-500