{"url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/","section":"academy","title":"Leveraged and inverse ETFs | ETFIQ","description":"Learn what a 3x or -3x ETF promises, why it resets every day, and why a month's result differs from 3 times the index, using real TQQQ and SQQQ data.","as_of":"Nov 10, 2026","structured_data":[{"@type":"LearningResource","@id":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/#lesson","name":"Leveraged and inverse ETFs: what the daily promise means","description":"Over 30 days to Nov 10, 2026, QQQ fell 10.2% and TQQQ, a 3x fund, fell 30.4%, not the 30.6% 3 times QQQ implies.","url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/","learningResourceType":"Lesson","teaches":"What a leveraged or inverse ETF promises (a multiple of the index each day) and why a longer period gives a different result","educationalLevel":"Intermediate","timeRequired":"PT7M","inLanguage":"en","isAccessibleForFree":true,"isPartOf":{"@type":"Course","@id":"https://etfiq.com/academy/trading-products-and-costs/#course","name":"Trading Products and Costs","url":"https://etfiq.com/academy/trading-products-and-costs/"},"position":4,"dateModified":"2026-11-10","author":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"},"publisher":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"}},{"@type":"FAQPage","@id":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/#check","mainEntity":[{"@type":"Question","name":"What does a 3x daily leveraged ETF aim to deliver?","acceptedAnswer":{"@type":"Answer","text":"3 times the index's return each day, before fees. the target applies to one day and resets daily."}},{"@type":"Question","name":"An index rises 5% one day and falls 5% the next (hypothetical). About what does a perfect 2x daily fund return over the two days?","acceptedAnswer":{"@type":"Answer","text":"\u22121%. 1.10 \u00d7 0.90 = 0.99, a 1% loss."}},{"@type":"Question","name":"In the 30 days to Nov 10, 2026, SQQQ returned more than \u22123 times QQQ's move. What explains the extra?","acceptedAnswer":{"@type":"Answer","text":"Interest earned on its collateral, on top of its daily multiple. compounding changed the result by \u22120.22 points against \u22123 times the month, and the fund finished 1.87 points above its daily multiple, where an inverse fund's collateral interest shows up."}}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Academy","item":"https://etfiq.com/academy/"},{"@type":"ListItem","position":3,"name":"Trading Products and Costs","item":"https://etfiq.com/academy/trading-products-and-costs/"},{"@type":"ListItem","position":4,"name":"Leveraged and inverse ETFs","item":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/"}]},{"@type":"WebPage","name":"Leveraged and inverse ETFs","description":"Learn what a 3x or -3x ETF promises, why it resets every day, and why a month's result differs from 3 times the index, using real TQQQ and SQQQ data.","url":"https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/","dateModified":"2026-11-10","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":6206,"truncated":false,"content":"ETFIQ / Academy / Trading Products and Costs / Leveraged and inverse ETFs \n \n Leveraged and inverse ETFs: what the daily promise means\n Data as of Nov 10, 2026. Rebuilt every trading night.\n Over 30 days to Nov 10, 2026 , QQQ fell 10.2% and TQQQ, a 3x fund, fell 30.4% , not the 30.6% 3 times QQQ implies.\n Trading Products and Costs \u00b7 Lesson 4 of 6 1 2 3 4 5 6 \n Slide the amount. Compare the index, 3 times the month, 3 times each day compounded, and the fund. Amount (hypothetical) $10,000 On $10,000: QQQ \u2212$1,018, 3 times the month \u2212$3,055, 3x each day, compounded \u2212$2,988, TQQQ \u2212$3,041, SQQQ: -3 times the month $3,055, SQQQ: -3x each day, compounded $3,033, SQQQ $3,220. Hypothetical amounts. The 30 days to Nov 10, 2026. Step 1: the daily promise, kept. Over the window's 22 trading days, TQQQ missed 3 times QQQ's daily return by 0.129 points a day on average ( 12.9 basis points), tiny next to daily targets of several percent. Step 2: what the month looked like. QQQ fell 10.18% . Three times that is \u221230.55% . Step 3: what the daily multiple gives. Apply 3x to each day's move and compound the days: \u221229.88% . TQQQ actually returned \u221230.41% . Compounding against 3x the month: \u221229.88 \u2212 ( \u221230.55 ) = +0.67 points . TQQQ against the daily multiple: \u221230.41 \u2212 ( \u221229.88 ) = \u22120.54 points : fees, plus the cost of holding $3 of exposure for each $1 of cash. Step 4: the inverse side. SQQQ returned +32.20% , against +30.55% for \u22123 times the month and +30.33% for the daily multiple compounded. Compounding against \u22123 times the month: +30.33 \u2212 ( +30.55 ) = \u22120.22 points . It finished above its own daily multiple by +32.20 \u2212 ( +30.33 ) = +1.87 points . An inverse fund keeps its cash as collateral and earns interest on it, so its gap is often positive. \n The question\n A fund says \"3x QQQ\". If QQQ rises 10% this year, do I get 30%?\n The idea\n A leveraged ETF aims to return a multiple of an index's move, such as 2 or 3 times. An inverse ETF aims for the opposite, such as \u22121 or \u22123 times. The promise has one word that changes everything: daily . The fund targets its multiple for each day only .\n To do that, it resets every day. Picture a hypothetical 3x fund worth $100 with $300 of exposure (the amount of the index it gains or loses on, held through futures or swaps): The index rises 10%. The exposure gains $30, so the fund is worth $130. To be 3x again, it needs $390 of exposure, so it adds $60 .\n The index then falls 10%. The fund loses $39 and is worth $91 .\n \n The index went 100 \u2192 110 \u2192 99: down 1% . Three times that is \u22123%, but the fund is down 9% . Each day was exactly 3x; the two days together were not. Beyond one day, the path decides the result.\n Worked example\n The 3 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.\n TQQQ targets 3 times QQQ's daily return; SQQQ targets \u22123 times . Window: the 30 days from Oct 9, 2026 to Nov 10, 2026 .\n Neither fund delivered 3 times the month's move. Both did what they promise: 3 times each day.\n The common mistake\n \"A 3x fund gives me 3 times the index over whatever period I hold it.\" It gives 3 times each day. Over a month or a year, a steady trend can beat 3 times the move; choppy days can fall well short. Lesson 5 measures that shortfall.\n Check your understanding\n Pick an answer to see why. Two of three right passes the lesson.\n 1. What does a 3x daily leveraged ETF aim to deliver? A 3 times the index's return each day, before fees B 3 times the index's return over any holding period C 3 times the index's yearly return D 3 times the index's gains but only 1 times its losses Answer: A. 3 times the index's return each day, before fees. the target applies to one day and resets daily. Not B: over longer periods the resets compound along the path. 2. An index rises 5% one day and falls 5% the next (hypothetical). About what does a perfect 2x daily fund return over the two days? A \u22120.5% B \u22121% C 0% D +0.5% Answer: B. \u22121%. 1.10 \u00d7 0.90 = 0.99, a 1% loss. Not A: the index fell about 0.25% (1.05 \u00d7 0.95 = 0.9975), and 2 times that is \u22120.5%, but the fund compounds each day's 2x move. 3. In the 30 days to Nov 10, 2026 , SQQQ returned more than \u22123 times QQQ's move. What explains the extra? A SQQQ changed its multiple B The data is wrong C QQQ's fee is higher D Interest earned on its collateral, on top of its daily multiple Answer: D. Interest earned on its collateral, on top of its daily multiple. compounding changed the result by \u22120.22 points against \u22123 times the month, and the fund finished 1.87 points above its daily multiple, where an inverse fund's collateral interest shows up. Not A: the multiple stayed \u22123 daily; the gap came from collateral interest. \n Takeaways\n A leveraged or inverse ETF promises its multiple for one day at a time. \n Over longer periods, the path decides: steady trends can help, choppy days hurt. \n Check a fund's daily miss on its Tracking tab and its period result on the leverage desk. \n Do it on ETFIQ\n Check how closely your fund hits its daily target Your fund \n Where to next\n Next lesson: Leveraged decay in numbers: 3 months of 3x funds Previous lesson: Who keeps ETF prices tight: APs and market makers Trading Products and Costs: all lessons The explainer behind this lesson ETFIQ Academy How ETFIQ computes these numbers \n Cite this page. ETFIQ, Leveraged and inverse ETFs: what the daily promise means, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/ Free to use with attribution for data ETFIQ computes; issuer data stays under its owner's terms. The underlying files are at Open data .\n Other forms Plain ETFIQ, Leveraged and inverse ETFs: what the daily promise means, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/ APA ETFIQ. (Nov 10, 2026). Leveraged and inverse ETFs: what the daily promise means. Retrieved from https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/ Markdown [Leveraged and inverse ETFs: what the daily promise means (ETFIQ, Nov 10, 2026)](https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/)","source":"ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.","publisher":{"@id":"https://etfiq.com/#org","name":"ETFIQ","url":"https://etfiq.com"},"license":"https://etfiq.com/license/","license_text":"Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.","citation":"ETFIQ, Leveraged and inverse ETFs: what the daily promise means, data as of Nov 10, 2026. https://etfiq.com/academy/trading-products-and-costs/leveraged-and-inverse-funds/"}