Diversification in the stock market is a tried-and-true way to build wealth over time, but for those chasing a “get rich quick” scheme, communities like r/WallStreetBets emphasize the thrill of YOLOing your net worth into a potential 10-bagger. Fortunately, for the adventurous market players willing to make big bets, new ways to wager on hot stocks — whether bullish or bearish — are emerging, offering the chance to amplify their gains (or, in the worst case, their losses).

Singles only: In response to retail investors’ fervor for trendy stocks, institutional fund managers have launched nearly 100 single-stock exchange-traded funds (ETFs). These ETFs allow investors to wager on well-known domestic and foreign companies. Currently, the largest dedicated stock ETFs focus on industry goliaths like Tesla ($TSLA), Nvidia ($NVDA), and Coinbase ($COIN), which account for most of the assets in single-stock ETFs. In recent months, issuers have doubled down on their bets, anticipating that finance enthusiasts will seek more options for trading other up-and-comers.

• In the past month, new single-stock ETFs tracking Palantir ($PLTR), Uber ($UBER), and Taiwan Semiconductor ($TSMC) have debuted.
• Another fund manager has even filed to create targeted stock funds focused on foreign firms such as Novo Nordisk ($NVO), Toyota ($TM), and HSBC ($HSBC) — all of which are traded on the US exchange but may not always reflect the performance of their local markets.

Double or Lose Double

The majority of single-stock ETFs provide investors with the option to enhance their gains or bet against stocks — or, in some cases, a mix of both. These leveraged and inverse (short) ETFs have attracted a significant share of these unique funds’ $13B inflows.

• The most popular single-stock ETF, the GraniteShares 2x Long NVDA Daily ETF ($NVDL), has over $5B in assets under management and has grown 314% YTD, compared toNVDA
  ’s 155% return.
• While most of these funds are bullish, there are also inverse funds — some even leveraged to maximize returns from price declines, like the AXS 1.25x NVDA Bear Daily ETF ($NVDS), down 77% YTD.

Risky business: Although these funds sound like a tempting way to boost returns or short popular equities, they are hotbeds for risk. When approved two years ago, SEC Commissioner Caroline Crenshaw cautioned that single-stock ETFs come with a “high level of risk.” If a 2x leveraged product rises, you could theoretically double your returns — but your losses would also be doubled if it falls. For this reason, ETF providers recommend that only experienced investors use these funds — and only for short-term trading rather than long-term strategies.