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Enter values above to see your projected returnsHow to Calculate Defiance Daily Target 2x Long MSTR ETF (MSTX) Investment Returns
MSTX provides 2x daily leveraged exposure to MicroStrategy stock, effectively offering leveraged Bitcoin proxy exposure.
Understanding Leveraged ETF Decay and MSTX
Defiance Daily Target 2x Long MSTR ETF uses daily leverage, which means its returns compound on a daily basis. Over time, this creates volatility decay (also called beta slippage) — even if the underlying index returns to its starting point, MSTX may not. This makes tracking your true cost basis critically important.
Why Average Down Calculators Are Essential for MSTX
Many MSTX holders buy during dips to lower their average cost. But with daily leverage compounding, simply averaging your buy prices does not give an accurate picture. You need to factor in:
- The exact quantities purchased at each price level
- Exchange fees that eat into each transaction
- Tax implications — short-term vs long-term capital gains matter significantly
- The break-even price after all costs
Our calculator handles all of this automatically, giving you the real picture instead of back-of-napkin math.
Leveraged ETF Risk Factors
| Factor | Impact on MSTX |
|---|---|
| Daily Rebalancing | Compounds gains AND losses daily |
| Volatility Decay | Erodes value in sideways markets |
| Expense Ratio | Higher than non-leveraged ETFs |
| Contango (Futures-based) | Additional drag from futures roll costs |
Why Use BasisPoint for MSTX?
- Instant Calculations: See your net profit, break-even price, and ROI in real time.
- Tax Presets: Auto-apply capital gains tax rates for US, Korea, Japan, UK, Spain, and more.
- Average Down Tracking: Add multiple buy positions to see your true average cost.
- Privacy-First: All calculations run locally in your browser. No data is ever sent to any server.
- Share Results: Export your calculation as a shareable image with one click.
Frequently Asked Questions — Defiance Daily Target 2x Long MSTR ETF (MSTX)
What is the best strategy for MSTX?▼
Since MSTX is a bull leveraged ETF with 2x daily leverage, it suffers from volatility decay in sideways markets. Most experts recommend MSTX for short-term tactical trades (days to weeks) rather than long-term buy-and-hold. If you do hold longer, tracking your average cost with a calculator is essential to know your true break-even point.
How does volatility decay affect MSTX?▼
Volatility decay (also called beta slippage) erodes MSTX's value even when the underlying index moves sideways. For example, if MSTX's index drops 10% then rises 10%, your position doesn't return to zero — it's actually down about 1%. Over weeks and months, this compounding effect can significantly reduce your returns. This is why your actual break-even price is almost always higher than your purchase price.
Should I average down on MSTX?▼
Averaging down on leveraged ETFs like MSTX can be a valid strategy, but it requires discipline. Because of daily rebalancing, buying more shares at a lower price can meaningfully reduce your average cost. However, the risk level is Very High — if the trend continues against you, losses are amplified. Use our Average Down calculator to see exactly how many shares you need at what price to reach your target average before committing more capital.
What are the fees for trading MSTX?▼
MSTX has an expense ratio built into the ETF price, which is higher than non-leveraged equivalents (typically 0.75%–1.0% annually). On top of that, you'll pay your broker's commission (many now offer commission-free trades) and potentially a bid-ask spread of $0.02–$0.05 per share. Our calculator factors in exchange fees to show your true net profit.
What tax rate applies to MSTX gains?▼
In the US, MSTX gains held less than 1 year are taxed as short-term capital gains (10%–37% depending on income). Gains held over 1 year qualify for long-term rates (0%–20%). For international investors, additional withholding taxes may apply — Korean investors pay 22%, Japanese pay 20.315%. Use our Tax Preset dropdown to automatically apply your country's rate.
Is MSTX suitable for retirement accounts?▼
While technically allowed in most IRAs and 401(k)s, MSTX is considered Very High risk and is generally not recommended for retirement portfolios due to volatility decay. The daily leverage reset means long-term returns can diverge significantly from the expected multiple of the index return. If you do hold MSTX in a tax-advantaged account, the benefit is that short-term gains aren't immediately taxed.