Silver's Slide: WisdomTree's 3x Leveraged ETC Plummets Nearly 50% in Two Weeks

A triple-leveraged silver ETC lost nearly half its value in two weeks, demonstrating the severe risks of daily-reset products during market turbulence and futures backwardation.

A triple-leveraged exchange-traded commodity (ETC) tracking silver has demonstrated the severe risks of daily-reset products during market turbulence. The WisdomTree Silver 3x Daily Leveraged vehicle has shed approximately 47% of its value in the span of just ten trading sessions, offering a stark case study in the accelerated erosion of capital these instruments can cause.

Designed for Short-Term Tactical Moves

Currently holding assets of around €187 million, the WisdomTree product ranks among the most liquid leveraged silver instruments on the London Stock Exchange. It carries a total expense ratio of 0.99% annually. Market strategists emphasize that this ETC is structured exclusively for experienced investors with a very short-term trading horizon. The mechanism of resetting its leverage daily creates a compounding effect in volatile trending markets, which can disproportionately magnify losses. The recent drawdown of nearly half its value in under two weeks puts this inherent risk on full display.

Unusual Futures Market Dynamics Apply Pressure

A significant driver behind the decline stems from an atypical structure in the silver market. Futures are currently in a state of backwardation. While the spot price for silver stood near $84, COMEX front-month futures were recently trading around $82. This technical scenario has direct consequences for the ETC.

The product does not track physical silver. Instead, it mirrors the performance of the Solactive Silver Commodity Futures SL Index, which is based on COMEX front-month contracts. Consequently, the ETC is immediately impacted by roll costs and liquidations in the futures market, even as industrial demand for the physical metal remains fundamentally solid.

Technical Picture Turns Bearish

Chart analysis presents a uniformly negative outlook. The ETC is trading within a broad descending trend channel, with both short and long-term moving averages issuing sell signals. The Relative Strength Index (RSI) indicates bearish divergence, suggesting that despite any brief rallies, the primary trend remains firmly downward.

Technical analysts now view a previous "cup-and-handle" formation as having failed. A daily close for the underlying metal below the $75 level is considered a critical support threshold. A breach of this level could potentially trigger another wave of selling.

Extreme Volatility on Display

The volatility engulfing the sector was particularly extreme on Friday, March 20. During that single trading session, the ETC swung between an intraday low of $103.82 and a high of $152.30—a dramatic range of 46.6%. This capped a streak of six consecutive losing days heading into the weekend, underscoring the intense pressure faced by leveraged holders.