Short & leveraged simulator
If we examine an S&L ETP built to provide daily returns, then at the end of each day the base value is "reset" and used as the starting point for the next day's returns. These daily resets cause a compounding effect upon returns if the ETP is held for longer than one day.
WisdomTree’s S&L simulator was created to help investors understand the daily returns provided by S&L ETPs as well as the compounding effect of the daily reset over time.
With a few basic inputs into the simulator below, investors can quickly see the theoretical return (excluding fees) of an S&L ETP in different market scenarios.
Step 2: Choose 1 of the following 3 scenarios: Volatile, Trending upward and Trending downward, or select Manual to input your own daily % change values and model a custom market scenario.
Index value reflects the value of the underlying index without any leverage for each day based on the daily percent change in the underlying.
ETP price shows the value of the ETP for each day based on the daily % change in the underlying and the leverage factor.
Return without daily reset
Return without daily reset demonstrates the change in the value of an equivalent investment with the same leverage factor without any compounding.