Short-term traders are proving eager to bet on a rapid recovery in Nvidia , pouring money into the three largest leveraged exchange-traded funds which are linked to gains in the share price of the AI chipmaking giant.

Single-stock ETFs betting heavily on Nvidia's blistering rally plunged overnight, tracking losses logged by the chip darling. Leveraged single-stock ETFs supercharge the companies they track, delivering amplified returns.

Day traders spent last year shoving billions of dollars into leveraged Nvidia Corp. ETFs in a bid to amp up their gains on the hottest stock on the planet. Now those wagers are in peril.