NVDL Drops 12% in One Session After Nvidia Selloff Highlights the “Daily Reset” Trap of 2x ETFs

GraniteShares’ 2x Long NVDA Daily ETF, ticker NVDL, plunged about 12% in a single session on Friday, June 5, 2026, according to market pricing. The fund opened near $109.45 and closed at $95.91, while Nvidia’s stock fell from $218.66 to $205.10, roughly consistent with a large down day for the underlying.

NVDL is designed as a daily-reset leveraged product, meaning its goal is to deliver 2 times (200%) the daily percentage change in Nvidia’s common stock, before fees and expenses. GraniteShares also warns that the ETF should not be expected to provide 2 times Nvidia’s cumulative return for periods longer than a day, a key point that becomes painfully clear when the stock swings quickly.

In practical terms, the “daily reset” structure aims to re-set leverage at the start of each trading day so that one day’s move in NVDA translates into about two days’ worth of that move inside the ETF. But returns over multiple days are driven by compounding, not simple multiplication of the start-to-finish NVDA change. GraniteShares notes that due to daily rebalancing and daily compounding, NVDL’s multi-day return will very likely differ from 200% of Nvidia’s multi-day return, and it can lose money even if the underlying ends up flat over longer windows.

The ETF’s losses on June 5 were also a reminder that the mechanics are implemented through derivatives rather than owning Nvidia stock outright. GraniteShares states that it has entered into a swap agreement with a counterparty (Natixis) backed with collateral for its leveraged exposure. That design matters because, even on days when the target outcome is achieved in theory, the realized result can still differ from the underlying move due to fees, swap-related effects, and day-to-day implementation details that are not identical to holding the stock itself.

What triggered the Nvidia selloff on June 5 was broader, risk-sensitive market repricing, market reporting said. A Reuters account of the day’s chip selloff pointed to reverberations from Broadcom’s weaker report earlier in the week as AI-linked chip stocks dropped, with Nvidia down roughly 6% and losing more than $300 billion in market capitalization.

Separately, Reuters also linked higher yields and rate expectations to a strong U.S. jobs report on Friday, noting that nonfarm payrolls rose by 172,000 and that the labor-market strength supported higher short-term rate expectations. The original NVDL write-up attributed the ETF’s decline to a combination of Broadcom-related AI demand worries and the payroll-driven shift in rate sentiment, but those specific drivers were not confirmed by Nvidia in any disclosure tied to the ETF’s move.

GraniteShares’ own disclosures emphasize that NVDL is intended as a short-term trading vehicle and that investors can lose full principal value within a single day under adverse moves. What remains less precise in the public discussion is how much of the day’s difference versus a “clean” 2x pattern came from swap implementation, intraday path effects, and fees, because the issuer does not break out those components for a specific date in the materials reviewed here. For traders watching the next session, the immediate question is whether Nvidia’s volatility persists, since leveraged ETFs are most vulnerable when the underlying repeatedly chops rather than trends.