NVIDIA's "Leveraged ETF" is going crazy!

This week, as a core company in the artificial intelligence boom, NVIDIA released a strong financial report, driving the stock price to set multiple records, and the bullish call options surged accordingly.

With retail traders' enthusiasm for NVIDIA soaring, GraniteShares launched the GraniteShares 2x Long NVDA Daily ETF (NVDL) in December 2022, achieving an astonishing 450% return in the past year, far exceeding NVIDIA's own 196%. The trading volume hit a new high of $4.7 billion last week.

Speculative sentiment is spreading in the market, and the creators behind these leveraged ETFs are preparing to launch more option-driven new strategies covering various assets from gold, large tech stocks to Bitcoin. GraniteShares CEO Will Rhind pointed out that NVIDIA is gradually becoming the new Tesla.

Rhind stated on Bloomberg TV's ETF IQ program, "Three years ago, we were talking about Tesla, that was where the enthusiasm was. Now clearly the whole conversation is dominated by NVIDIA, which is why I believe NVIDIA is currently the most important stock in the world."

According to Bloomberg Intelligence data, leveraged funds are favored this year, with $11 billion already flowing in, potentially catching up to last year's $20 billion. Investors are seeking new tools to bet on major market themes, increasing demand for such funds. However, these funds have also sparked controversy, partly because retail traders (usually less sophisticated than institutional traders) face high risks.

GraniteShares has applied for at least 25 ETFs, tracking other single-stock ETFs with daily 2x and 3x leverage strategies. Rhind added, "We are providing retail investors with institutionally priced leverage, which is a big breakthrough. With leverage comes risk, and these products are not without risk."