What are the best leveraged ETFs for beginners?

SPXL and TQQQ are commonly used by beginner-level traders with some experience and a bullish market view .

Can I hold leveraged ETFs long term?

It’s not recommended. Most leveraged ETFs are designed for daily performance , not long-term compounding.

Do leveraged ETFs pay dividends?

Some do, but the yields are generally low and not the main reason to invest in these funds.

Are leveraged ETFs safe?

They carry high risk and require active management. They’re best for traders, not passive investors .

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Best Leveraged ETFs to Watch or Invest In Right Now

May 22, 2025

5 min Read

Written by Joseph Hostetler

Edited by Joe Evans

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Looking for fast-moving ETF strategies that magnify your market exposure? Whether you’re a bullish or bearish investor, picking the best leveraged ETFs amplifies your bets and potentially delivers double — or even triple — the returns of traditional funds. But they can also amplify the risks, which is why choosing the right leveraged ETF matters.

In this guide, we’ll break down top leveraged ETFs to watch, what makes them stand out and how to use them responsibly in your trading strategy.

Best Leveraged ETFs in 2025

Here are some of the best leveraged ETFs attracting attention in 2025 for their performance, liquidity and strategic use cases:

ETF	Ticker	Leverage	One-Year Return	Focus Area	Key Feature
ProShares UltraPro QQQ	TQQQ	3x	+42.5%	Nasdaq-100	Triple exposure to large-cap tech stocks
Direxion Daily S&P 500 Bull 3X	SPXL	3x	+37.8%	S&P 500	Aggressive bet on broad market upside
ProShares UltraShort QQQ	SQQQ	-3x	-39.6%	Nasdaq-100	Short exposure to tech-heavy index
Direxion Daily Semiconductor Bull 3X	SOXL	3x	+55.2%	Semiconductors	High-growth chip sector focus
ProShares UltraPro Short S&P 500	SPXU	-3x	-30.4%	S&P 500	Used to hedge against downturns

Bonus Pick: Direxion Daily TSLA Bull 1.5X Shares (TSLL)

Offers leveraged exposure to Tesla stock
Best for traders with strong short-term views on TSLA performance

Why Invest in Leveraged ETFs?

The advantages of leveraged ETFs lie in their ability to boost returns over short periods. Here’s what makes them appealing:

Magnified Gains: Get 2x or 3x the daily returns of the underlying index.
Short-Term Trading Power: Great for tactical moves during market volatility.
Hedging Potential: Inverse leveraged ETFs allow you to profit from declines.
No Margin Required: Unlike leverage trading directly, ETFs don’t require margin accounts.

These funds are popular with day traders, swing traders and anyone making high-conviction bets on market direction.

Leveraged ETFs vs. Other Investment Options

Investment Type	Risk Level	Growth Potential	Volatility	Holding Time
Leveraged ETFs	High	Very High	Very High	Short-Term
Traditional ETFs	Medium	Moderate	Medium	Long-Term
Options Contracts	Very High	Very High	Very High	Short-Term
Index Funds	Low-Medium	Moderate	Low	Long-Term

Leveraged ETFs offer a middle ground between traditional ETFs and options, giving higher returns potential with less complexity than derivatives.

Risks of Investing in Leveraged ETFs

Before investing, it’s crucial to understand the risks of leveraged ETFs:

Daily Reset Risk: Returns are calculated daily — holding for longer periods can lead to performance drift.
Compounding Error: Volatility can work against you due to math, especially in choppy markets.
High Volatility: Leverage works both ways — losses are magnified just as much as gains.
Not For Passive Investing: These aren’t “buy and hold” funds — they require close monitoring.

Tip: Only invest money you can afford to lose and use stop-losses to manage the downside.

Trends Shaping Leveraged ETF Investing in 2025

Several trends are driving renewed interest in leveraged ETFs:

AI-Powered Trading Strategies: More retail traders are using tools to time entry and exit points.
Volatility-Based Strategies: Leveraged ETFs thrive in volatile environments — ideal for active markets.
Thematic Concentration: Leveraged ETFs targeting sectors like semiconductors, energy or big tech are gaining traction.
Fractional Trading Access: Investors can now buy fractional shares, making high-priced ETFs more accessible.

These developments make 2025 a strong year for tactical traders exploring leverage responsibly.

How to Buy Leveraged ETFs

If you’re ready to try leveraged ETFs, here’s how to get started:

Open a brokerage account: Use platforms like TD Ameritrade, Fidelity, E*TRADE or Robinhood.
Search for the ticker symbol: Try TQQQ, SPXL, SOXL or SQQQ based on your market outlook.
Read the prospectus: Understand the fund’s strategy, fees and compounding risks.
Choose your position size carefully: Start small — leveraged ETFs can move quickly.
Use limit orders and stop-losses: Set price targets and risk parameters before you trade.

Final Take to GO

The best leveraged ETFs in 2025 offer bold investors a way to amplify market movements and pursue outsized gains in sectors like tech, semiconductors, and the broader indexes. But with high reward comes high risk–these are tactical tools, not long-term core holdings.

Thinking of adding leverage to your strategy? Start with small amounts, monitor your positions closely, and make sure leveraged ETFs fit your investing goals and risk tolerance.

For more insight, check out our guide to ETF investing or how to trade during market volatility to build your confidence before diving in.

FAQs About Leveraged ETFs

Here are some of the best leveraged ETFs to invest in if you're looking to take advantage of market volatility:

What are the best leveraged ETFs for beginners?
- SPXL and TQQQ are commonly used by beginner-level traders with some experience and a bullish market view.
Can I hold leveraged ETFs long term?
- It’s not recommended. Most leveraged ETFs are designed for daily performance, not long-term compounding.
Do leveraged ETFs pay dividends?
- Some do, but the yields are generally low and not the main reason to invest in these funds.
Are leveraged ETFs safe?
- They carry high risk and require active management. They’re best for traders, not passive investors.

Information is accurate as of May 22, 2025.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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