Correct in principle — from what I recall, leverage ETFs' beta decay over time is caused by the overhead of the leverage. You can see this with SH, for example;

Correct in principle — from what I recall, leverage ETFs' beta decay over time is caused by the overhead of the leverage. You can see this with SH, for example; while it seems to perfectly mirror SPX, there's a slow rate of value loss over time. However, if you look at ETFs like TMF over time, short-term gains easily overcome the decay. If you'd invested in TMF on Jan 1, you'd be up 92% now. And it's not like options and shorts don't come with premiums. There's no free lunch, but there's the possibility of returns wildly beyond your initial investment.