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Returns & Compounding Calculators
Simulate for yourself why 2x and 3x leveraged ETFs lose money in a sideways market.
KOSPI about 15 to 20%, Nasdaq about 20 to 25%
1 year ≈ 252 trading days
Enter your values and press Simulate
Leveraged ETF return
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When the underlying index repeats +10% one day and −10% the next (10 days)
The principle
A leveraged ETF tracks 2x or 3x the daily return. Because it is reset every day, losses build up when prices keep going up and down. This is called volatility drag.
Pick sideways, rising or falling, or enter the trend and volatility yourself.
It generates a random path of daily returns and plots the underlying index and the leveraged ETF together.
It repeats the same conditions 1,000 times and shows the probability of loss and the median.
L is the leverage multiple, μ is the underlying index trend and σ is volatility. A 3x ETF bears a cost of (9 − 3)/2 = 3 times the variance. With 25% volatility, that means about 19 percentage points a year disappear to drag. Real ETFs also have swap and financing costs, so results can be even worse.
If a strong uptrend continues, holding long term can return more than the multiple of the underlying index. But in a sideways market or during high volatility, you can lose heavily even when the underlying index goes nowhere, so you need to understand the risks before you approach them.
Yes. Korean leveraged and inverse ETFs also track a multiple of the daily return. In Korea, buying leveraged ETFs requires completing prior training and meeting a minimum deposit requirement.
No. They are random paths that assume a normal distribution, so sharp crashes and spikes in the real market (tail risk) are under-represented. Use the tool to understand the structure.
Results are estimates based on your inputs and simplified assumptions, and are for reference only, not a basis for investment decisions.
Last updated: November 2, 2026
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