⚡ Leveraged ETF Volatility Decay Simulator

"TQQQ = 3 × QQQ's return" — simulate why this formula is wrong, and how much the real loss actually is.

💰 Investment Settings

Initial investment (KRW)

⚠️ What Is Volatility Decay (Beta Slippage)?

A leveraged ETF tracks N times the underlying index's return every single day. Because of compounding, its long-run return diverges from a simple multiple of the index's return.

The loss is especially severe in a choppy, sideways market.

Estimated decay = L(L-1)/2 × σ² × N L = leverage, σ = daily volatility, N = trading days e.g. 3x, σ=1.5%, 252 days → roughly 8.5% decay

LEVERAGED ETF MAPPING

QQQ → TQQQ (3x) / QLD (2x)

SPY → UPRO (3x) / SSO (2x)

SOXX → SOXL (3x)

IWM → TNA (3x) / UWM (2x)

Underlying index (1×) return

Volatility decay loss

📈 Return Comparison Chart

📊 Final Results Comparison

Item	Return	Final value	Vs. base
📌 Underlying index (1×)			Baseline


📉 Decay loss (vs. expected)

Why a Leveraged ETF Is Risky to Hold Long Term

A 3x leveraged ETF tracks 3 times the underlying index's "single-day" return. Because of this daily-reset structure, a choppy, sideways market — where the index ends up flat — can still slowly erode the ETF's value through volatility decay. This simulator shows numerically how much decay eats into your return, given a volatility level and holding period.

For real TQQQ/SOXL cases and the underlying math, see why holding a leveraged ETF long term is risky; for how a downside-betting product is structured, see the complete guide to inverse ETFs.