A risky corner of the ETF market has boomed this year as YOLO traders chase the rally

A fund that tracks Nvidia stock is one of the most popular leveraged ETFs.

Slaven Vlasic/Getty Images for The New York Times; Chelsea Jia Feng/BI

• A risky corner of the stock market has boomed in 2024 amid another year of stellar gains.
• Traders have piled into leveraged single-stock ETFs, seeking to amplify returns on popular names like Nvidia.
• These types of ETFs have attracted more than $20 billion in assets in 2024.

While the stock market was an early frontier of the gambling craze that gripped America in 2024, investors have driven a boom in a relatively new kind of investment product that can amplify gains — and losses — in a single name.

Enter leveraged single-stock exchange-traded funds.

Since their introduction in the early 1990s, ETFs have been groundbreaking in offering the characteristics of a mutual fund — owning a basket of diversified stocks — but offering the daily trading liquidity of a single stock.

But even after 30 years, the humble ETF is seeing fresh updates that cater to investors with a strong appetite for risk.

Instead of owning a basket of stocks, single-stock ETFs track the price of one stock, which the fund will try to juice returns on by levering up.

"These are vehicles that mass retail has never had the ability to trade before, until now," Todd Sohn, an ETF specialist at Strategas told Business Insider.

The GraniteShares 2x Long NVDA Daily ETF seeks to deliver double the move of Nvidia's daily price fluctuations.

On Friday, Nvidia stock jumped about 2.5% amid a broader market rebound, while shares of the 2x Nvidia ETF returned nearly 5%. Year-to-date, the 2x Nvidia ETF is up 346%, compared to a 170% gain for the stock.

"Traders are looking to implement high-conviction ideas through them," Sohn said.

Investors are pouring billions of dollars into these funds, making for some highly successful ETF launches in recent months.

That 2x Nvidia ETF has attracted more than $5 billion in assets, while other popular leveraged ETFs tracking stocks like MicroStrategy and Coinbase have each attracted well over $1 billion in assets.

That's a big deal for the ETF space, where the breakeven point for most ETF products is around $50 million in assets, according to white-label ETF provider Alpha Architect.

Year-to-date, more than 60 ETFs have launched catering to single-stocks, attracting a combined $23 billion in assets, according to data provided by Sohn.

While that amounts to relative peanuts in the $10 trillion universe of ETFs, it's still notable, and the funds are seeing a lot of use.

"They do pop up quite often on the most traded ETFs list," Sohn said, adding that ETFs linked to Nvidia, Tesla, Coinbase, and MicroStrategy are the most popular.

But while they can deliver outsize returns, these investment vehicles are inherently risky, much more so than owning the underlying stock.

Sohn said that leveraged ETFs are incredibly volatile, and due to options decay, they're best used as a trading vehicle, "not a set it and forget it vehicle," Sohn said.

Options decay refers to the idea that, even if the underlying stock trades sideways, the leveraged ETFs would likely move lower as options expire with zero value and new contracts are purchased.

And the leveraged downside tied to these ETFs can be painful.

During Nvidia's summer correction, the 2x long Nvidia ETF lost about 63%, prompting concern from Redditors who invested.

"Now I've lost a ton on NVDL (not touching my NVDA) and I am trying to think what makes the most sense," a Redditor said in a post on the Nvidia subreddit earlier this year.

Another example is MicroStrategy stock, which is down about 33% from its late November peak, while the 2x ETF that tracks the stock is down more than 60% over the same period.

The trading craze recalls another popular recent high-risk investment trend—the zero-day option. The contracts are a bet on the single-day move in a stock, with the option expiring the same day a trader buys it. The market took off during the pandemic trading boom, and it got so big that JPMorgan warned last year that its popularity could spark bouts of volatility in the broader market.

But for now, the risks appear to be limited to the individual traders who are buying them and not the broader market.

"While single-stock leveraged ETFs have gained in popularity this year, they remain relatively small in size. For example, NVDL has $5.5 billion in assets and NVIDIA is a $3 trillion stock," Todd Rosenbluth, head of research at TMX VettaFi, told Business Insider.

Going forward, risk-on traders seem less concerned about the risks associated with the single-stock ETFs and more focused on which one will take off next.

"The next questions is… what name catches on next with the trading crowd? Palantir seems to be one candidate (and has 2x ETFs out there). But we'll see what else comes up," Sohn said.

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Apple's busy 2024 included AI, new iPhones, antitrust issues, and a tough time in China

 Tim Cook led Apple through a year of highs and lows in 2024.

Chris Jackson/Getty Images

• Apple launched new products in 2024, including the Vision Pro and AI-powered iPhone 16.
• It faced challenges in China with iPhone sales and antitrust issues in the US and Europe.
• Apple also introduced Apple Intelligence at WWDC, marking its entry into the GenAI market.

It's been an eventful year for Apple.

The tech giant launched a brand new hardware product, made its official entrance into generative artificial intelligence, and added a new iPhone generation — all in the span of 12 months.

It's also faced questions about CEO succession, challenges in one of its largest markets, and criticism about being behind in the AI arms race compared to some of the industry's fiercest players. Meantime, it's been under antitrust scrutiny from both US and EU authorities.

"2024 has been a year of notable highs and lows for Apple as it expanded into mixed reality and AI while navigating shifting consumer preferences and market dynamics," Jacob Bourne, tech analyst at Business Insider's sister company EMARKETER, said.

Apple got off to a rocky start this year. Its stock got two analyst downgrades in early January, with bankers citing worries about poor iPhone sales in China. Still, it celebrated wins in the services department of its business and partnered with OpenAI to bring ChatGPT to new iPhones. It explored new territory with the Apple Vision Pro and upgraded company staples, including iPads and AirPods.

Here's a look back at Apple's 2024.

There was trouble in China

Apple CEO Tim Cook speaks at a conference in Beijing, China in March 2024.

Fu Tian/China News Service/VCG via Getty Images

Apple started 2024 with struggles in its important Greater China region — a trend that continued. Analysts called sales of the iPhone 15 in China "lackluster" as competitors like Huawei and Xiaomi stepped up their competition in the local smartphone market.

It showed throughout Apple's earnings in 2024. Although the company beat revenue estimates in its fiscal fourth-quarter, sales in China missed and dropped year over year.

Still, Apple CEO Tim Cook said there are "positive signs" in the region during the fiscal Q4 earnings call on October 31. Cook took frequent trips to China this year — at least three times, as of November — amid fears that Donald Trump's potential tariffs will affect the country that makes a majority of Apple's iPhones, AirPods, Macs, and iPads.

"China's just been a disappointment in '24, full stop," Gene Munster, managing partner at Deepwater Asset Management, said.

Apple launched the Vision Pro in February

Apple Vision Pro was met with weak demand, analysts previously told BI.

Anadolu/Getty Images

Apple launched its first headset, the Vision Pro, in February. The mixed reality device retails for $3,500, making it one of Apple's priciest products to date.

The headset was met with mixed reactions. Its uses are limited, and it was unclear if the tech was for gamers or professionals. Months after it released, Cook told The Wall Street Journal that the Vision Pro is for "people who want to have tomorrow's technology today."

"At $3,500, it's not a mass-market product," Cook said. "Right now, it's an early-adopter product."

Apple is reportedly slowing down its Vision Pro production and is instead eyeing a more affordable version of the headset.

It was hit with a DOJ lawsuit in March

The US Department of Justice accused Apple of maintaining an illegal monopoly on the smartphone market in an antitrust lawsuit. The DOJ alleged the iPhone maker was involved in "delaying, degrading, or outright blocking" rival technology. Apple denied the allegations.

The suit said the company "repeatedly responded" to competitive threats by "making it harder or more expensive for its users and developers to leave than by making it more attractive for them to stay."

Apple asked a federal judge to dismiss the lawsuit in August, saying the government's argument includes speculation. US District Court Judge Julien Xavier Neals will have to decide whether or not the case will go to trial.

Neals' decision could come as early as January, Bloomberg reported.

Meanwhile, in Europe, Apple was fined about $2 billion related to its App Store and was subject to other competition concerns in the region.

Apple rolled out new iPads

iPads performed well for Apple in 2024.

Apple; Business Insider

As OpenAI, Google, and others announced updates and demonstrated the power of their new AI assistants, Apple introduced new iPads in May.

The latest iPad Pro models are the first to have OLED display; Cook and Co. unveiled them at Apple's "Let Loose" event. Cook said it was "the biggest day for iPad since its introduction."

Although the launch came as Apple watchers waited for a bigger AI announcement, iPads performed well for Apple in Q3.

Apple Intelligence was finally introduced at WWDC

Apple Intelligence launched in October.

Apple

The world was introduced to Apple Intelligence at the annual Worldwide Developers Conference in June.

Apple's official debut into the AI wars, which have escalated since OpenAI launched ChatGPT in 2022, was the "biggest story" of the year, William Kerwin, a technology analyst at Morningstar, said.

The hype around Apple Intelligence was instant. Dan Ives, global head of technology research at Wedbush Securities, said it would usher in a "golden upgrade cycle" for iPhones. Apple said it'd be a big part of the iOS 18 software update too, though Apple Intelligence is only available on iPhone 15 Pro models or later.

The company made some lofty promises at WWDC, and plans to deliver on them after the initial rollout in October and through 2025, although not all the features touted have launched yet. So far, US iPhone users have gotten access to "Writing Tools," AI-generated emojis, and ChatGPT through Siri. The company had been criticized for its late entry to the AI scene.

"They caught up by partnering and by adding AI to something only Apple can do," Munster said.

Meanwhile, the company is reportedly exploring ways it can bring Apple Intelligence to Chinese iPhone owners. Apple will have to partner with a local company if it wants to deliver AI to its most important international market.

The first AI iPhone launched

Finishes for the new iPhone 16 Pro.

Apple

Apple announced its first iPhone "built from the ground up to deliver Apple Intelligence" at its "Glowtime" event in September.

The company faced slowing iPhone sales in the quarters leading up to the launch; the new AI-enabled iPhone 16 was expected by some to be the boost it needed. It released without Apple Intelligence, though that was made available through a later iOS update. It did come with a new camera control button and some software updates.

The phones start at $999 for the iPhone 16 Pro and $1,199 for the Pro Max model. Although a golden upgrade cycle hasn't happened yet, analysts still have high expectations for the next year of iPhones.

"We believe iPhone 16 has kicked off a multi-year supercycle for Apple as the AI Revolution comes to the consumer," Ives said in an analyst note.

It scrapped some projects along the way

Among the new launches in 2024, Apple also axed some ideas that were said to be in the pipeline.

Bloomberg reported in December that Apple would no longer work on building a subscription service for iPhones. The team working to make iPhone ownership possible through monthly fees and annual upgrades was reassigned to other projects, according to the article.

The tech giant also shut down its buy now, pay later service, Apple Pay Later, in June, instead partnering with Klarna to bring its offering to Apple Pay, The Verge reported.

In April, Apple filed documents outlining that it planned to cut more than 600 employees working on projects related to screens and its electric car. Before that, the company reportedly told 2,000 employees that it would wind down its multi-year efforts to make an electric car.

Still, canceling the Apple Car to reassign talent to its Apple Intelligence efforts was part of a "one-two combo" that helped the company catch up in AI, Munster said.

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Leaked MrBeast docs reveal contestant terms for 'Beast Games' — including a $500K penalty for divulging info

Jimmy Donaldson, known online as MrBeast, has a new competition show on Amazon Prime Video.

AaronP/Bauer-Griffin/GC Images

• YouTube star MrBeast has a new competition show that will debut Thursday on Amazon Prime Video.
• BI viewed a copy of a contestant release form and other documents for the preliminary "Beast Games" round.
• An entertainment attorney said the documents were fairly standard but expansive in their terms.

Documents obtained by Business Insider reveal the terms that contestants of MrBeast's competition show, "Beast Games," were asked to agree to during a preliminary round.

The terms prohibit contestants from disclosing information about the show, which debuts Thursday on Amazon Prime Video. Contestants who break the agreement prior to the last episode airing must pay the producer and network $500,000 for each breach. After the last episode airs, each breach would cost contestants $100,000, the documents said.

The documents also ask contestants to agree that their portrayal in the program may be "disparaging, defamatory, embarrassing, or of an otherwise unfavorable nature," and may expose them to "public ridicule, humiliation, or condemnation."

Daniel J. Ain, an entertainment attorney at RPJ Law, said the terms are largely standard for a competition show, but some — like the threat of a $500,000 charge for each breach — are particularly expansive.

"The producers use every available tool to give them ultimate flexibility to make the show and protect themselves from liability," Ain told BI, calling the documents a "contestant agreement on steroids."

"Beast Games" is a 10-episode physical competition show in which contestants compete for a $5 million prize. YouTube's top star — whose real name is Jimmy Donaldson — is the host.

The show has attracted some controversy ahead of its release. A New York Times report in August cited "over a dozen" participants who said they didn't receive enough food or medical care during the preliminary round of competition in Las Vegas.

The documents obtained by Business Insider relate to the Las Vegas taping, where over 2,000 contestants participated in physical challenges designed to see who would make the show's official production round in Toronto.

The documents include information about the show, a contestant questionnaire form, and an outline of the show's official rules and protocols. By signing the form, contestants gave full consent to the use of hidden cameras and recording devices, gave producers full discretion to edit footage, and agreed to participate for no money. Potential prizes were the only form of compensation.

A person close to the production characterized the Las Vegas production as a "promo shoot" for the show and said Amazon wasn't involved. Amazon did not respond to a request for comment from BI.

Read 24 pages of the documents below:

Note: BI omitted some pages from the document that included the contestant's personal information and a few pages with minimal or repeated information.

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Tiun gives media companies another way to monetize online content. It just raised $2.5 million with this pitch deck.

Tiun cofounders Nikolaos Christoforakos, Sandro Zweig and Christian Heiduschke.

Tiun

• Tiun has secured a $2.5 million pre-seed funding round to innovate media monetization.
• The startup offers a pay-for-what-you-use model to reduce friction for media consumers.
• Business Insider got an exclusive look at the 9-slide deck it used to raise fresh funding.

Zurich-based startup Tiun has raised $2.5 million in pre-seed funding for its digital wallet, which lets users pay only for the online media they consume and provides businesses with an alternative way to monetize their content.

The startup aims to streamline the online subscription process, which its cofounder and CEO Nikolaos Christoforakos says is "full of friction" — from registering and authorizing an account to committing to an upfront subscription.

"Our mission is to help media providers — and more broadly service providers — to attract, engage, and convert younger audiences," Christoforakos told Business Insider.

Instead of subscribing to multiple individual media providers, Tiun offers users a digital wallet they can use across multiple media partners to purchase preferred content on a "pay-for-what-you-use" basis.

The account is free to create, with users topping up funds using an established payment method. This eliminates the need to enter new payment details for every outlet and eases the friction in the consumer journey, Christoforakos said.

Tiun gets a slice of each transaction, splitting the rest with the media provider. Companies providing the content — from podcasts to streaming to online news — can also access Tiun's business suite with metrics on reader data and conversions.

"There's a value to the product outside of the infrastructure, and on top of that, we make money with a revenue share," Christoforakos told BI.

Media organizations have been exploring micropayment models for several years — but with limited success. Dutch online news platform Blendle, one of the main champions of micropayments, later ditched its model in favor of subscriptions. Christoforakos says that Tiun is not positioning itself as a micropayment service that's in competition with previous efforts.

But the startup is providing the infrastructure that addresses one of the oft-cited reasons for the micropayment model's slow adoption: the lack of a standard payment method across media outlets.

"Our vision is to redefine how the next generation will consume and pay for online content by establishing a new standard that improves interoperability between wallets and applications," Christoforakos said.

Tiun's funding round was led by Swiss VC firm Founderful, with additional funds coming from Blue Wire Capital and a16z scout Maximilian Lehmann, among other angel investors.

With the fresh funding, Tiun will develop some core product offerings in the coming year.

We got an exclusive look at the 9-slide pitch deck used to secure the fresh funding.

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How Rokos stayed true to its big-bet roots and became the old-school manager every investor wants

Billionaire Chris Rokos still runs the majority of his firm's portfolio, which is rare for a fund of its size.

Les Wilson; BI

• The $19 billion manager Rokos Capital is an outlier in the increasingly institutional hedge fund industry.
• Its billionaire namesake, who was a cofounder of Brevan Howard, runs the majority of the portfolio.
• While multistrategy funds are attractive for their diversification, Rokos is appealing for its big bets.

Investors in the billionaire Chris Rokos' eponymous hedge fund had reason to celebrate the reelection of Donald Trump.

The firm made nearly $1 billion in profits the day following Trump's victory, Bloomberg first reported, pushing its year-to-date gains to more than 28% through mid-November.

The macro manager, now running $19 billion, made money across asset classes following the election, when US stocks ripped upward, the dollar strengthened, and Treasury yields jumped — as did many funds that put on the "Trump trade" before the election.

But very few firms the size of Rokos Capital Management have so much of their portfolio concentrated with a single risk-taker. While Rokos has hired quasi-portfolio managers who can put on trades — known in the firm's parlance as "investment officers" — the firm's founder still runs the majority of the portfolio, several people close to the firm said.

As the hedge fund industry's titans have shifted away from macro philosophers to business-building executives, Rokos is a throwback to a time when names like Stanley Druckenmiller and George Soros were on the top of every allocator's wish list.

And the anachronistic London-based manager has ridden its strong performance and, ironically, the movement away from its style of investing to its record size. The biggest investors in the world — sovereign wealth funds, pensions, endowments, and more — now need diversification in their portfolios from the sprawling multistrategy managers that often move as a group and put on similar trades.

Against this backdrop, Rokos stands out for its lack of correlation with the industry's biggest names.

"Pensions need the volatility," one Rokos investor at a US pension told Business Insider. Limited partners in Rokos include Canada's main pension fund and Blackstone, people familiar with the firm said.

And after raising another $2 billion in assets earlier this year, Rokos is not slowing down, industry insiders said. The firm declined to comment.

'Deprived' of his abilities

The 54-year-old Oxford-by-way-of-Eton grad cut his teeth at UBS, Goldman Sachs, and, finally, Credit Suisse, where he spent a little over three years trading alongside Alan Howard.

In 2002, Howard, Rokos, and three other Credit Suisse traders left the now-defunct Swiss bank to launch Brevan Howard (the "R" in Brevan is for Rokos). A decade later, the star trader left the manager hoping to start his own investment firm.

A five-year noncompete agreement stopped any immediate plans, though, despite Rokos' lawyers arguing that the sit-out period would leave the public "deprived" of his "skills and hard work."

Eventually, Rokos and Howard settled their dispute, and Howard even backed Rokos' new manager, reports at the time said. Rokos Capital Management launched in the fall of 2015, quickly growing to $3.5 billion before closing to new money.

In a preview of things to come, Rokos profited from Trump's first election in 2016 — the manager returned close to 20% in its first full year of trading.

Nearing its 10th anniversary, Rokos today resembles the original Brevan more so than the current iteration of Howard's manager. Brevan, which has seen its assets rise and fall thanks to uneven performance over the past decade, is structurally closer to multistrategy managers like Citadel and Millennium as it diversifies assets across risk-takers around the world.

When Brevan launched, Howard was the biggest risk-taker; Now, he no longer trades for the manager, BI reported earlier this year.

Headquartered on the posh London strip known for its bespoke tailoring, Roko's firm has a "Savile Row style" of customization for its founder. The team and research functions are molded to his way of investing, a former employee told BI, even down to the font and color coding of reports.

Savile Row, located in London's Mayfair neighborhood, is home to a number of bespoke tailors.

Dukas/Universal Images Group via Getty Images

The goal of the firm's dozens of investment officers, analysts, and researchers — regulatory filings show that 60 people perform "investment advisory functions" across the firm's London and New York offices — is to be his "eyes and ears," this person said, adding: "When he had a question, there was a number we could find to answer it."

Rokos' superpower is his ability to monitor positions like "a human quant." One person who worked with him said he knows the positions put on by his investment officers better than they do, despite managing a much larger book.

This person also said he could stay steady in areas he's confident in, even if markets move against him in the short term.

"He's willing to wait through cycles if he believes the risk is worth it," another person who worked for him said.

A demanding place

It wasn't the plan for Rokos to be the only one putting on trades when the firm launched, people familiar with his thinking at the time said, though that was the reality for a number of years.

Several people at the firm at its start said the issue was that he couldn't find people who thought and traded exactly like him. These people said it's a physically demanding place that requires working long hours alongside a founder who constantly questions everything.

"He has a relentless pursuit of the truth," one person said.

As a result, the firm has cycled through several executives and management structures over the years. Mark Edwards, a former Goldman Sachs managing director who joined Rokos at its launch, stepped down from his CEO perch earlier this year, triggering a slew of changes.

Matthew Sebag-Montefiore, a onetime partner at the consultant Oliver Wyman, is now the CEO, while Pria Bakhshi was promoted to the global head of strategic solutions. Quita Ramirez joined last December as the global head of business development, investor relations, and communications from Schonfeld. Dmitry Green and Lauren Fairbairn, both partners, left this year.

Still, Rokos has worked to delegate some of the risk-taking to others. One investor estimated he takes 60% to 70% of the firm's risk, and that may continue to go down.

Several people close to the firm said he's hoping to add more investment officers, specifically in equities. The exact number of investment officers the firm employs is unclear, though a LinkedIn review shows 17 with the title, many of whom are also partners.

Volatility wanted

While it's counterintuitive, the manager's biggest selling point might be the roller-coaster nature of its returns. A 44% surge in 2020 was followed by a 26% drop in 2021. In 2022, when the S&P 500 dropped more than 18%, the manager had its best year on record, with a 51% gain.

With worries the industry might be hitting peak multistrategy, managers with a higher risk-return profile should be more common, the billionaire AQR founder Cliff Asness wrote earlier this year.

Alternatives "are generally more effective in higher-vol versions," he wrote but "mostly (not entirely) missing from the market today and should take on a bigger role."

As Brevan has transformed into a more diversified platform, and the likes of Louis Bacon, Michael Platt, and David Tepper have returned outside capital, allocators and industry insiders said it's hard to find a peer of Rokos'.

Jeffrey Talpins' Element Capital mostly runs internal money after returning funds at the start of the year, and Said Haidar overhauled his manager after a 43% loss in 2023. Paul Tudor Jones has expanded into quant strategies and seeded external funds, though he's still known for big directional bets.

Rokos, a press-shy billionaire whose media mentions are mostly about construction projects at his multimillion-dollar properties, including a 100-bedroom manor that dates to the days of Henry VIII, is in a league of his own, one investor said.

The limit to the firm's growth, this person said, is going to be internal restraints, not external interest.

"He could raise another $2 billion with a snap of his fingers," this person said.

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The head of Russia's chemical weapons was killed when a scooter bomb exploded in Moscow

Igor Kirillov, the head of the Russian Defence Ministry's radiological, biological, and chemical protection unit, was killed in an explosion in Moscow.

AFPTV/AFP via Getty Images

• Russia's head of chemical weapons was killed on Tuesday.
• The general, Igor Kirillov, died in an explosion when a bomb in a scooter in Moscow went off.
• His assistant also died in the attack, the country's investigative committee said.

A high-ranking Russian general responsible for Russia's chemical weapons was killed on Tuesday by a bomb in a scooter.

Lieutenant General Igor Kirillov, the head of Russia's Nuclear, Biological, and Chemical Protection Troops, was killed by a bomb planted in a scooter parked on a street in Moscow, the country's investigative committee said in a statement on Telegram on Tuesday.

"According to the investigation, on the morning of December 17, an explosive device was detonated in a scooter parked next to the entrance of a residential building on Ryazansky Prospekt in Moscow," the statement said.

"As a result of the incident, the head of the radiation, chemical and biological protection troops of the Armed Forces of the Russian Federation Igor Kirillov and his assistant were killed," it added.

The committee said it had opened a criminal case into the murder of two servicemen in Moscow.

The statement said investigators and forensic experts were working at the scene.

The Russian investigations committee did not immediately respond to a request for comment from BI.

This is a developing story. Check back for updates.

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The weirdest job in AI: defending robot rights