Short-term traders are eagerly betting on a quick rebound for Nvidia (NVDA.O), funneling money into the three largest leveraged exchange-traded funds (ETFs) linked to the AI chipmaker’s stock price.
These leveraged funds, designed to deliver double the daily return of Nvidia’s stock, saw significant interest after the company experienced its largest one-day market capitalization drop in history on Monday, triggered by news of China’s DeepSeek releasing a new AI model.
Will Rhind, CEO of GraniteShares, reported about $1 billion in inflows into their GraniteShares 2x Long NVDA Daily ETF (NVDL.O). Despite this, the fund’s assets dropped from over $6 billion last year to around $4.3 billion, due to the impact of Nvidia’s selloff.
On Monday, all four leveraged Nvidia ETFs saw losses of 33%-34%, according to LSEG data. The T-Rex 2x Long Nvidia Daily Target ETF (NVDX.Z) experienced $7.6 million in inflows, boosting the fund to $488.4 million. Its smaller inverse fund saw $3.1 million in outflows.
The Direxion Daily NVDA Bull 2x Shares ETF (NVDU.O) had inflows of $61.4 million, bringing its assets to about $435 million. Its inverse fund also saw $3 million in inflows.
While U.S. stocks ended higher on Tuesday with Nvidia and other AI-related shares recovering from Monday’s losses, the smallest of the leveraged Nvidia ETFs, the $3 million Leverage Shares 2x Long NVDA Daily ETF (NVDG.O), experienced six times the average trading volume, indicating strong speculative interest. By the end of Monday, inflows had turned positive and continued into Tuesday.
