What is the downside buying leveraged shares

I don’t mean CFDs. I mean the ones in ISA and Invest. There are some leveraged shares I’ve seen such as Tesla and I like the idea that if Tesla goes say 2%, I’d see a say 6% return on my shares and that I don’t have to pay overnight fees. However, like everything else there’s a downside and was wondering if anyone can shine some light on what these downsides are.

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Well, if the Tesla bubble pops, you won’t only have single losses to deal with but 3X the loss…


But say if I keep buying in to average down, will the company holding these leveraged shares do the same or they can close it down. Hopefully the end bit of my sentence makes sense.

In my own experience with Graniteshares Rolls Royce 3xshort it’s more of a risk because they have intraday stop loss mechanisms built in, so if the stock drop more than 16.7% or (50.1% on the leverage) in any given day, the whole fund gets reduced significantly weather you doubled down on it or not, with the 3xshort Rolls Royce instrument we had two intraday stops losses in one day and the fund lost all its investment leaving everyone with nothing, after that it suffered early redemption and was discontinued, on the other side of this the people who bought the 3x Long did very well from it! :joy::man_facepalming: some are safer than others, depending on the price movements of the stock, if it’s trading with volatile prices best to avoid all together, really I think they are designed to be used for daily trading and not of long term investments, also there are still interest payments that are deducted from them based of the covering the 3x leverage which you should take into account