NVDL Lost 67 Percent in Early 2025 While NVIDIA Fell Far Less, And the Daily Reset Did Most of It

NVDL provides two dollars of NVIDIA exposure for each dollar invested, with leverage recalibrated each morning. The fund targets 2x the daily return of NVDA, so leverage is reset at every close. When NVDA falls and then rises by the same amount over consecutive days, NVDL can still end lower because daily percentage moves compound differently under leverage. Over many choppy sessions, this path dependency creates a volatility tax that widens losses relative to NVDA. In early 2025, NVDL dropped far more than NVDA, and recovering to prior peaks required many trading sessions despite NVDA recovering faster.

"The pitch behind GraniteShares 2x Long NVDA Daily ETF ( NASDAQ:NVDL) is elegantly simple. You want more NVIDIA ( NASDAQ:NVDA | NVDA Price Prediction) than your account can hold, so NVDL gives you two dollars of exposure for every dollar invested, recalibrated each morning. The mechanic that makes that possible is also the mechanic that gutted holders during the early 2025 drawdown, when NVDL lost 68% from peak to trough on April 4, 2025, while the underlying stock fell roughly 35% over the same stretch. NVDL did exactly what the prospectus promised on a one-day basis."

"The fund targets 2x the daily return of NVIDIA, which means leverage is rebalanced at every close. Imagine NVIDIA drops 10% on Monday, then rallies 11.11% on Tuesday. The stock is back to flat. NVDL, however, falls 20% Monday, then rises 22.22% Tuesday. You end up at 0.80 times 1.2222, roughly 0.978. You are down about 2.2% on a stock that went nowhere. Stretch that arithmetic across a hundred choppy sessions and you get the gap between a 35% drawdown and a 67% one."

"That 5-year chart might look good for NVDL now, but I would not hold this if you want to win for the long run. One more downturn like the one in early 2025 can hurt your portfolio significantly more than if you just held NVDA. Early last year's receipt From January 2 to April 30, 2025, NVDL fell 51%. The share price slid from almost $70 to about $35. NVIDIA over the same window declined 21%, from about $138 to almost $109."

"The extra ground, roughly eight percentage points of additional pain, is the volatility tax. The April 4 intraday low was worse still, and the recovery back to the prior NVDL peak required 77 trading sessions, even though NVIDIA itself reclaimed most of its loss faster. Picture a retail trader who bought NVDL in March 2025 exp"

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