GraniteShares 2x Long NOW Daily ETF (NOWL) seeks to provide 2x leveraged daily exposure to ServiceNow Inc. (NOW), a leading cloud computing company specializing in digital workflow automation and IT service management platforms for enterprises.
How It Works
This single-stock leveraged ETF uses derivatives including swaps and futures to deliver twice the daily return of ServiceNow stock. The fund resets daily, meaning it targets 200% of NOW's performance each trading day, not over longer periods. Holdings consist primarily of derivative instruments rather than the underlying stock itself. Daily rebalancing maintains the 2x leverage ratio but causes compounding effects that deviate from 2x returns over multi-day periods.
Key Features
- Provides 2x leveraged exposure to ServiceNow, a $150+ billion cloud software leader without requiring margin accounts
- Daily reset mechanism allows precise short-term trading around ServiceNow earnings or product announcements
- Zero expense ratio structure potentially reduces costs compared to traditional leveraged products during initial period
Risks
- This ETF can lose 40%+ in a single day if ServiceNow drops 20%, with losses compounding rapidly over multiple days
- Daily rebalancing means holding periods beyond one day create path-dependent returns that deviate significantly from 2x underlying performance
- Single-stock concentration risk means company-specific events like competitive threats, regulatory issues, or management changes cause extreme volatility
Who Should Own This
Designed for active traders with very high risk tolerance seeking short-term (hours to days) tactical exposure to ServiceNow momentum. Requires constant monitoring and should represent less than 5% of portfolio. Unsuitable for buy-and-hold investors or retirement accounts due to daily reset mechanics.