I went long thousands of shares of SOXL in one of my accounts back in April with a volatility/price target on the underlying SOX index as an exit signal. Is it free money lolol? Hell no. But so long as the trader is experienced, mindful of how these ETFs work, sticks to equity based products, avoids holding inverses, and stays cognizant of the dangers it's a manageable risk. That said a lot of newbs will get rekt on a big drawdown and their inevitable capitulation and nobody should even contemplate holding commodity or volatility based leveraged ETFs long term, looking at you XIV, WTI, et al. Here's a paper that is suggestive of how one might manage the risks of holding UPRO long term and do extremely well. I haven't verified their backtest but for anybody interested here's the link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701 The upshot is a simulated UPRO going back to 1928 would never have experienced a high enough single day drop to liquidate and would have outperformed the unleveraged S&P by orders of magnitude.
There's this guy on wallstreetbets that actually made out okay doing triple levered ETF's as a diversified portfolio. It was a mix of triple levered ETF's for SPY and one for TLT i think. It was hilarious but he did make his million. Keep in mind back test only goes back to 2010, and I got lazy so don't be lazy but we've been in a bull market since the recovery after the great recession of 2008-2009. edited to include a portfolio visualizer back test and yeah I agree there is some volatility drag in the products due to nature of using leverage, and re balancing daily. This is what was the downfall of one of my favorite volatility products, SVXY back when it wasn't nerfed to oblivion. 2nd Edit, GGWP I can't get my picture to load, I'm a loser.