Short-term traders are showing keen interest in betting on a rapid recovery in Nvidia, as they pour money into the three largest leveraged exchange-traded funds linked to the AI chipmaking giant's share price.
According to asset managers, speculators and traders are rushing to buy these funds, which aim to deliver double the daily return in Nvidia. This surge in interest follows a significant drop in Nvidia's market capitalization on Monday, in response to news of China's DeepSeek launching a new artificial intelligence model.
Will Rhind, founder and CEO of GraniteShares, mentioned, "We saw about $1 billion in inflows into our main product," referring to the GraniteShares 2x Long NVDA Daily ETF. However, this was insufficient to offset the impact of Nvidia's substantial selloff, causing its assets to decrease to around $4.3 billion from a peak of over $6 billion last year.
On Monday, all four Nvidia leveraged long ETFs experienced losses between 33% and 34%. The T-Rex 2x Long Nvidia Daily Target ETF had inflows of $7.6 million into the $488.4 million fund, while its bearish counterpart faced $3.1 million in outflows, as reported by Scott Acheychek, the COO of REX Financial.
The Direxion Daily NVDA Bull 2x Shares ETF, with assets around $435 million, observed $61.4 million in inflows. Similarly, its inverse fund received approximately $3 million in inflows.
The smallest among the leveraged Nvidia ETFs, the $3 million Leverage Shares 2x Long NVDA Daily ETF, did not immediately provide flow details in dollar terms. However, Paul Marino, Chief Revenue Officer of Themes ETFs overseeing Leverage Shares' U.S. business, noted a sixfold increase in trading volume, indicating significant speculative trader involvement in Nvidia. Marino further stated that flows turned positive by the end of Monday and remained so throughout Tuesday.