Leveraged ETFs See Big Flows as Traders Time the Market

Leveraged ETFs are back in the spotlight this year, with traders enthusiastically piling into these high-octane vehicles to chase short-term moves across stocks, commodities and crypto.

Year to date, leveraged ETFs have seen $5.5 billion in net inflows, while over the past 12 months, inflows have ballooned to $16.7 billion—an impressive show of confidence (or risk appetite) from traders.

Timing the Market with Leveraged ETFs

At the top of the leaderboard is the Direxion Daily TSLA Bull 2X Shares (TSLL), which has raked in a whopping $3.3 billion of inflows this year. Despite Tesla Inc. (TSLA) shares plunging 40% year to date, traders are aggressively buying the dip, hoping for a sharp rebound.

TSLL, which offers two times daily exposure to Tesla, is down around 70%—a painful drawdown for those who got in too early but potentially an opportunity for those timing a turnaround.

Another crowd favorite is the ProShares UltraPro QQQ (TQQQ), which has picked up $1.4 billion in flows this year. The fund offers three times leveraged exposure to the Nasdaq 100 Index and has become a popular tool for tech dip-buyers. 

The Nasdaq 100 and the Invesco QQQ ETF (QQQ) recently fell into correction territory, dropping more than 13% from their highs. TQQQ, meanwhile, has lost about a third of its value from its peak and is down 25% year to date.

Traders Sell the Rip in Natural Gas

But it's not all dip buying. Some traders are positioning on the other side—selling the rip. The ProShares UltraShort Bloomberg Natural Gas ETF (KOLD) has attracted more than $600 million in inflows this year as traders bet against the rally in natural gas prices.

The commodity briefly hit its highest level in over two years amid a cold winter, record U.S. LNG exports and geopolitical tensions involving Russia. But leveraged ETF traders aren't buying the bull case. 

They've plowed into KOLD—a fund designed to return two times the inverse daily return of natural gas prices—betting that the commodity will erase its 10% year-to-date gain. So far, those bearish bets have gone unrewarded, with KOLD down nearly 50% since the start of the year.

Leveraged Crypto Plays Find Buyers

Meanwhile, funds tied to MicroStrategy Inc. (MSTR) are also seeing strong inflows. The Defiance Daily Target 2X Long MSTR ETF (MSTX) and its competitor, the T-Rex 2X Long MSTR Daily Target ETF (MSTU), have brought in a combined $950 million this year.

While MicroStrategy stock has traded flat in 2025 after a sharp drop late last year, the leveraged funds are down about 20% due to volatility drag. Investors are banking on the Bitcoin proxy stock resuming its climb.

Dip-buying has also been rampant in Ether, the second-most-valuable cryptocurrency by market cap. The 2x Ether ETF (ETHU) has lost nearly three-quarters of its value this year as Ether prices have cratered over 40%, disappointing investors who believed that the launch of spot ether ETFs in 2024 might boost the cryptocurrency.

Competition from blockchains like Solana and lingering uncertainty around Ethereum’s long-term value proposition have weighed on sentiment. Still, ETHU has garnered over half a billion dollars in new assets this year as leveraged traders bet on a rebound.

Notable Leveraged ETF Inflows

Other notable leveraged ETFs that have seen hefty inflows this year include:

• The Direxion Daily Semiconductor Bull 3X Shares (SOXL), a dip-buying play targeting the chip sector, which has been a key beneficiary of the AI boom.
• The GraniteShares 2x Long NVDA Daily ETF (NVDL), offering a more targeted way to bet on the AI narrative through one of its biggest winners—Nvidia.
• The ProShares Short S&P500 ETF (SH), drawing flows from investors betting on continued losses in the broad market or hedging existing long positions.
• The Direxion Daily Palantir Bull 2X Shares (PLTU), reflecting aggressive bets on one of the market’s hottest AI/defense stocks.
• The Direxion Daily GOOGL Bull 2X Shares (GGLL), an aggressive bet on Alphabet, one of the biggest recent laggards among the Magnificent 7 tech giants.