Leverage wear (repost)

Seeing some friends still asking, I'll repost it again.

Many friends have been unclear about what leverage decay is, so here's a simple explanation.
The decay referred to here is not the daily management or handling fees charged to holders—transaction and handling fees occur during buying and selling—but rather the loss caused by market fluctuations returning to the initial level.

For example, the current price of the underlying stock being tracked is 100 yuan.
Assume the market movement over the next four trading days is:
drop 10% → rise 10% → drop 10% → rise 10%.

For ordinary stocks:
100*0.9*1.1*0.9*1.1=98.01.
For triple leverage, the rise and fall are magnified threefold:
100*0.7*1.3*0.7*1.3=82.81.
After a round of volatile market movements, the underlying stock is barely affected, while the triple-leveraged product suffers massive decay, making it extremely difficult to return to the initial position.

For leveraged ETFs like YINN, riding the trend is advantageous for us ordinary retail investors.
However, during volatile downtrends, it becomes highly unfavorable.

$iShares MSCI Hong Kong ETF (FXI.US), as YINN's primary tracking benchmark, was around 37 at its peak and is now at 32. Meanwhile, YINN was around 60 at its peak and is now at about 32. The decay caused by this volatile downtrend is evident.