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Why does 2x leverage lose
money in a choppy market?
An anatomy machine · press the steps in order
Index fund
$100.00
2x fund
$100.00
2× the index's gain
$100.00
2x fund vs that
$0.00
Trading day
0
The big idea:
a loss shrinks the base
, so the same rebound pays back less, and 2x feels it twice.
Machine colour
Break it: daily swing
10%
leverage
2x