🎢 How much do you lose from leveraged ETF decay?

Leveraged ETFs promise outsized returns, but they hide a massive risk: daily-reset decay. As seen recently in South Korea, retail investors lost $1.5 billion in just nine weeks after piling into a 2x single-stock ETF. When a stock experiences severe volatility, the leveraged product can wipe you out entirely, even if the underlying company is posting record profits. This calculator shows how much you save by holding the regular stock instead of a 2x ETF during a turbulent market.

According to r/investing, the trigger for the Korean crash was absurd. SK Hynix posted its most profitable quarter ever with 60.5 trillion won in operating profit. That is a 550% increase. Yet the stock still dropped about 10%.

When you hold a leveraged product, a sharp drop destroys your principal. Because the leverage resets daily, you have less capital working for you when the stock finally bounces back. Enter your investment below.

The real danger is volatility drag. The 2x SK Hynix product plummeted 80% from June, while the underlying stock fell far less. The catastrophic result saw over 320,000 retail accounts force-liquidated in under three months.

Even if the underlying stock fully recovers its losses, the leveraged ETF lags behind permanently. Simulate a sudden drop followed by a robust recovery below. You will see how daily-reset decay silently erodes your wealth.

For further related reading, check out:

• Reddit