{"url":"https://etfiq.com/learn/leverage","section":"learn","title":"Leveraged ETF Terms Explained in Plain Words | ETFIQ","description":"What the stated multiple, daily reset and decay mean, and why two times a day is not two times a year.","as_of":"Oct 27, 2026","structured_data":[{"@type":"DefinedTermSet","@id":"https://etfiq.com/learn/leverage#terms","name":"Reading a leveraged ETF: the words","url":"https://etfiq.com/learn/leverage","hasDefinedTerm":[{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/leverage#stated-multiple","url":"https://etfiq.com/learn/leverage#stated-multiple","name":"Stated multiple","inDefinedTermSet":"https://etfiq.com/learn/leverage#terms","description":"What the fund sets out to return against its underlying, each day. A fund at 2x aims to return twice the underlying\u2019s daily move, and an inverse fund at -2x aims to return twice it in the opposite direction."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/leverage#daily-reset","url":"https://etfiq.com/learn/leverage#daily-reset","name":"Daily reset","inDefinedTermSet":"https://etfiq.com/learn/leverage#terms","description":"The fund starts each day aiming at the multiple again, from wherever it now stands. It is the mechanism that makes these funds behave as they do, and the reason the stated multiple applies to a day rather than to a holding period."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/leverage#compounding","url":"https://etfiq.com/learn/leverage#compounding","name":"Compounding","inDefinedTermSet":"https://etfiq.com/learn/leverage#terms","description":"Daily results multiply together rather than adding up. Two days of the multiple is not twice the multiple, and over a run of days the difference between the two grows with how far the underlying moves about."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/leverage#decay","url":"https://etfiq.com/learn/leverage#decay","name":"Decay","inDefinedTermSet":"https://etfiq.com/learn/leverage#terms","description":"What compounding costs a holder when the underlying falls and rises back to where it started. The underlying is level and the fund is down; the more violently it moved, the further down."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/leverage#difference-against-the-stated-multiple","url":"https://etfiq.com/learn/leverage#difference-against-the-stated-multiple","name":"Difference against the stated multiple","inDefinedTermSet":"https://etfiq.com/learn/leverage#terms","description":"The fund\u2019s return minus the stated multiple times the underlying\u2019s return, in percentage points. The one number that says whether a holder got what the fund\u2019s own multiple describes."}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Learn","item":"https://etfiq.com/learn/"},{"@type":"ListItem","position":3,"name":"Reading a leveraged ETF: the words","item":"https://etfiq.com/learn/leverage"}]},{"@type":"WebPage","name":"Leveraged ETF Terms Explained in Plain Words","description":"What the stated multiple, daily reset and decay mean, and why two times a day is not two times a year.","url":"https://etfiq.com/learn/leverage","dateModified":"2026-10-27","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":2439,"truncated":false,"content":"ETFIQ / Learn / Reading a leveraged ETF: the words \n \n Reading a leveraged ETF: the words\n What the stated multiple, daily reset and decay mean, and why two times a day is not two times a year.\n A leveraged ETF aims to deliver its stated multiple over one day. It resets each morning and aims again from wherever it now stands, so a run of days compounds instead of adding up. Over a week the result is close to the stated multiple. Over a quarter it can be far from it, and the more the underlying moves about, the further.\n Stated multiple What the fund sets out to return against its underlying, each day. A fund at 2x aims to return twice the underlying\u2019s daily move, and an inverse fund at -2x aims to return twice it in the opposite direction. Daily reset The fund starts each day aiming at the multiple again, from wherever it now stands. It is the mechanism that makes these funds behave as they do, and the reason the stated multiple applies to a day rather than to a holding period. Compounding Daily results multiply together rather than adding up. Two days of the multiple is not twice the multiple, and over a run of days the difference between the two grows with how far the underlying moves about. Decay What compounding costs a holder when the underlying falls and rises back to where it started. The underlying is level and the fund is down; the more violently it moved, the further down. Difference against the stated multiple The fund\u2019s return minus the stated multiple times the underlying\u2019s return, in percentage points. The one number that says whether a holder got what the fund\u2019s own multiple describes. Where to next\n Reading a buffer ETF Reading an income ETF Reading a thematic ETF Reading a crypto ETF Reading an alternatives ETF All leveraged ETFs Definitions as ETFIQ uses them for leveraged ETFs. Standards and sources \n\n Cite this page. ETFIQ, Reading a leveraged ETF: the words, data as of Oct 27, 2026. https://etfiq.com/learn/leverage 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, Reading a leveraged ETF: the words, data as of Oct 27, 2026. https://etfiq.com/learn/leverage APA ETFIQ. (Oct 27, 2026). Reading a leveraged ETF: the words. Retrieved from https://etfiq.com/learn/leverage Markdown [Reading a leveraged ETF: the words (ETFIQ, Oct 27, 2026)](https://etfiq.com/learn/leverage)","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, Reading a leveraged ETF: the words, data as of Oct 27, 2026. https://etfiq.com/learn/leverage"}