GraniteShares 2x NVDA ETF lags NVIDIA stock despite double leverage due to daily reset and volatility decay.

The GraniteShares 2x Long NVDA Daily ETF (NVDL), designed to deliver twice the daily return of NVIDIA stock, has underperformed NVIDIA itself year to date and over the past year. This is due to the ETF's daily reset mechanism, which causes volatility decay, especially in choppy markets, reducing returns despite the 2x leverage. However, over five years, NVDL has significantly outperformed NVIDIA, benefiting from strong trending moves. The fund is recommended only for short-term traders as daily leverage resets can cause returns to diverge sharply from the underlying stock during volatile periods. Upcoming NVIDIA earnings will be key to whether NVDL narrows or widens its performance gap with NVIDIA stock.