Holding a 2x, 3x or inverse fund?

What the fund ends at

It starts with the SEC's own example: the index falls 10% one day and rises 10% the next. Change it to any days you like.

How we count: each day the index moves by its percent and the fund moves by the multiple times that percent, and both compound from one day to the next. "Many expect" is the multiple times the index's change over all the days. A day that would take the fund to zero counts as wiped out. Fees, borrowing costs and days a fund misses its own target are left out, and they usually make the result worse.

The SEC and FINRA, in plain words

• They reset every day. The SEC's investor office says most of these funds are built to hit their target one day at a time. Over weeks, months or years the result can be very different from the multiple, and more so when markets swing. SEC (Investor.gov), read 2026-11-04
• The two-day example. In the SEC's example, an index falls 10% and then rises 10%, ending down 1%. A fund aiming for twice the daily move does its job both days and ends down 4%. SEC (Investor.gov), read 2026-11-04
• A real four months. The SEC describes an index that gained about 8% over four months while a fund aiming for three times its daily return fell 53%. SEC (Investor.gov), read 2026-11-04
• Not for buy-and-hold. The SEC says these are specialized products that generally are not suitable for investors who buy and hold, and that a person could lose a lot even when the index gained over time. SEC (Investor.gov), read 2026-11-04
• FINRA's rule for brokers. FINRA told brokers that daily-reset leveraged and inverse funds are typically unsuitable for retail investors who plan to hold them longer than one trading session, especially in volatile markets. FINRA Regulatory Notice 09-31, read 2026-11-04
• Costs and taxes. The SEC says these funds may cost more than ordinary funds and may be less tax-efficient, because the daily resets can create short-term gains. SEC (Investor.gov), read 2026-11-04
• Ask before you hold one. The SEC suggests reading the prospectus and asking what happens if you hold longer than one trading day. FINRA's investor page explains the same products for investors. FINRA, read 2026-11-04

If the money has to last

Where every line comes from

Each page below was read on 2026-11-04. If a page changes, its own words win.

• SEC (Investor.gov): Updated Investor Bulletin: Leveraged and Inverse ETFs (Aug. 29, 2023), read 2026-11-04
• FINRA Regulatory Notice 09-31: Non-Traditional ETFs, read 2026-11-04
• FINRA: The Lowdown on Leveraged and Inverse Exchange-Traded Products, read 2026-11-04