Highlights:

1. AMDL suffered a significant 13.17% loss on Friday, September 5, closing the session at $9.10.
2. The single-day plunge erased all earlier gains, resulting in a weekly decline of approximately 14% for the ETF.
3. The fund dramatically underperformed major indices, which were only slightly negative, pointing to weakness specific to the underlying asset, AMD.
4. Trading volume remained high and consistent with its daily average, indicating broad participation in the sell-off.

Why Did the Leveraged AMD ETF Plummet 13% When the Market Barely Budged?

The GraniteShares 2x Long AMD Daily ETF (AMDL) ended the first week of September on a sharply negative note, experiencing a steep 13.17% decline on Friday that starkly contrasted with the relatively flat performance of the broader market. This significant divergence highlights the acute pressures facing the semiconductor sector and underscores the inherent risks of leveraged financial instruments. After a week of trading in a relatively stable range, Friday’s precipitous drop served as a harsh reminder of how quickly sentiment can shift and how violently those shifts are magnified by products like AMDL.

A Steady Week Undone by a Friday Plunge

The week began with a sense of stability for the leveraged fund. AMDL opened on Tuesday and quickly established a trading range above the $10 mark, closing at $10.58. It maintained this footing through Wednesday and Thursday, with closing prices of $10.54 and $10.48 respectively. This tight consolidation suggested a market in equilibrium, awaiting a catalyst. That catalyst arrived on Friday, but not in the way bulls had hoped. The ETF gapped down at the open to $9.885 and slid throughout the day, hitting a low of $9.00 before closing at $9.10. The move was backed by substantial volume of over 36 million shares, nearly identical to its 65-day average, confirming that this was not a low-volume anomaly but a broad-based exit by traders.

The Harsh Reality of 2x Leverage in Volatile Markets

Understanding Friday’s dramatic move requires a clear understanding of AMDL’s structure. As a 2x leveraged ETF, it is designed to deliver twice the daily return of Advanced Micro Devices (AMD) stock. This makes it a powerful tool for amplifying short-term gains when AMD is rising. However, this leverage is a double-edged sword. A significant down day for AMD, likely in the realm of 6-7%, translates into the kind of amplified, double-digit loss that AMDL holders experienced. The week’s action provides a crucial lesson in risk management for traders of such products; several days of stability can be erased in a single session, testing the conviction and discipline of even experienced market participants.

Looking ahead, the key level for traders to watch will be the psychological $9.00 mark, which served as the low point of Friday’s sell-off. Whether this level holds as support will be critical in determining the fund’s short-term trajectory. Ultimately, AMDL’s fate is inextricably tied to the performance of AMD stock and the headwinds facing the entire semiconductor industry. The coming week will be pivotal in assessing if buyers are willing to step in at these lower prices or if Friday’s breakdown signals the beginning of a new downward trend. For now, the event serves as a potent illustration that the potential for magnified rewards always comes with the reality of magnified risk.