The U.S. actually has such ETFs, where stocks can go up 10x, and they even have the potential to go up 20x or 30x!!!

Many people think ETFs can only track the ups and downs of an index, but actually, the U.S. market also has a product called leveraged ETFs.
Such ETFs are essentially fund companies using financial derivatives like swaps and futures to amplify the daily price movements of the underlying stock.
For example:
There is a 3x leveraged ETF for the Nasdaq 100, TQ
There is a 3x leveraged ETF for semiconductors, SOXL
Popular stocks like Nvidia, Micron, and Tesla also have 2x leveraged ETFs
Nvidia has a 2x leveraged ETF, NVDL
Micron has a 2x leveraged ETF, MUU
Tesla has a 2x leveraged ETF, TSLL
For example:
If Nvidia rises 5% today, a 2x leveraged ETF would theoretically rise about 10%;
If the semiconductor index rises 3%, SOXL would theoretically rise about 9%.
Since December 2022, the Nasdaq 100 has roughly doubled, while the Nasdaq 100 3x ETF has risen about 10x.
Many people would think
If a stock goes up 10x, a leveraged ETF must go up 20x or 30x, so why not just buy leveraged ETFs instead of the underlying stocks?
The answer is that it's not that simple.
In a one-sided bull market, leveraged ETFs do have the potential to gain dozens of times.
The reason is that leveraged ETFs track daily returns and rebalance their positions every day.
If the market keeps rising, compounding will continuously amplify returns, and sometimes the final gain can even exceed the simple 2x or 3x.
However, there is no free lunch. What leveraged ETFs fear most is not a bear market, but a choppy market.
If the market oscillates repeatedly, volatility decay occurs.
For example:
The index goes up 10% today and down 10% tomorrow.
Index Day 1: 100
Index Day 2: 110
Index Day 3: 99
Only a 1% loss.
A 3x leveraged ETF would:
Day 1: 100
Day 2: 130
Day 3: 91
A 9% loss.
Therefore, what leveraged ETFs fear most is not a one-sided bear market, but a trendless, oscillating market.
Leveraged ETFs are not a magic tool for long-term holding; they are products designed for daily returns.
Many fund companies remind on their websites that such products are generally more suitable for short-term trading rather than long-term holding.
If you are bullish on long-term trends like AI and semiconductors over the next few years, leveraged ETFs can be a tool to amplify returns;
But if the market continues to oscillate without a clear trend, leveraged ETFs can give you the feeling of your principal going to zero.
Many people get the direction right, but due to volatility decay, their final returns end up being worse than simply buying the underlying stock.