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 problem is that almost nobody holds it for one day.
What the daily reset actually does to your money
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. A pure 2x exposure with no path dependency would have produced something close to a 42% loss.
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 expecting a snapback. NVIDIA grinds back to roughly flat from their entry. NVDL is still down about 30%. They picked the right direction and the wrong instrument.
Where the structural drag hides
The expense ratio is 1.06%, but the real cost is the embedded financing for the swap exposure that delivers the 2x return. Add it up and a flat market with normal daily volatility costs holders something in the neighborhood of 5% to 8% per year before the underlying does anything. Trending markets mask this. Choppy markets reveal it.
The flip side is what happens when NVIDIA trends up. Over the trailing twelve months NVDL returned 110% against NVIDIA’s 62%. That works out to roughly 1.8x effective leverage after decay, which is still real money. The fund works when the underlying goes mostly one direction. It bleeds when the path is jagged.
Who this fund actually fits
NVDL was designed as a tactical instrument, and the data argues it should be treated as one. Three constraints stand out for any investor sizing a position.
- Holding period. The product is engineered for daily exposure. Multi-week or multi-month holds expose you to compounding decay that the prospectus warns about and that the 2025 drawdown made concrete.
- Volatility sensitivity. If implied volatility on NVIDIA is rising, the daily reset works against you even on days when the stock closes flat. The instrument is short variance whether you want to be or not.
- Alternatives that exist. A long-dated call option, a portfolio margin loan, or a deep in-the-money LEAP gives you NVIDIA leverage without nightly rebalancing. They have their own costs, but path dependency is not among them.
NVDL has nearly $4.5 billion in assets because plenty of traders want what it delivers on the right day. If you are using this fund as a swing trade vehicle with a defined exit, the math can work. If you are using it as a long-term NVIDIA proxy, you are paying a tax you may not have priced.
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