Short-term traders are keen to invest in Nvidia, with significant investments pouring into the three largest leveraged exchange-traded funds tied to the AI chipmaking giant's share price. Speculators and traders rushed to purchase funds aiming to double daily returns in Nvidia, according to asset managers on Tuesday.
"We had about $1 billion of inflows into our long product," said Will Rhind, founder and CEO of GraniteShares, regarding the GraniteShares 2x Long NVDA Daily ETF, the largest fund. However, this was insufficient to counter Nvidia's substantial selloff impact, which reduced assets from over $6 billion to about $4.3 billion last year.
On Monday, each of the four Nvidia leveraged long ETFs experienced losses of 33% to 34%, as per LSEG data. The T-Rex 2x Long Nvidia Daily Target ETF saw $7.6 million inflows into the $488.4 million fund, while its bearish ETF had $3.1 million outflows.
The Direxion Daily NVDA Bull 2x Shares ETF, with about $435 million in assets, had $61.4 million inflows, and its corresponding inverse fund received about $3 million inflows. The smallest among the four leveraged Nvidia ETFs, the $3 million Leverage Shares 2x Long NVDA Daily ETF, witnessed a surge in trading volume to six times the average, indicating high speculative trader involvement.
"That shows you how many speculative traders are involved in Nvidia," said Paul Marino, chief revenue officer of Themes ETFs, which oversees the U.S. business of Leverage Shares. By the end of Monday, flows had turned positive and remained so throughout Tuesday.