It's worth looking at what happened to leveraged tokens during September 24th 2019--a day cryptocurrency markets crashed between 10% and 30% on net and, for some coins, swung around wildly throughout.
The tokens will locally target +- 10x leverage: so if BTC moves 1%, MOON moves 10% and DOOM moves -10%.
If the tokens never rebalanced and BTC moves down 10%--which it did on September 24th--that would leave DOOM only -4.5x leveraged (it would have made 50% and not reinvested that), and it would leave MOON at 0. So instead, every 3% underlying move, the tokens rebalance to once again become +- 10x leveraged. This stops a -10% move from bankrupting MOON, and means that DOOM is using its profits to increase its short, keeping the 10% target.
That means that, during days with very large moves, the returns can diverge significantly from +-10x. In particular if markets keep moving down--exhibiting momentum--the tokens outperform +-10x: the MOON token will have reduced its risk and so remain above 0, and the DOOM token will compound its gains. On the other hand if markets move down and then back up--exhibiting mean reversion--the MOON token will have already sold off a lot of its position as markets went down and so will not recover as much when markets do, and the DOOM token will lose to having opened more short positions with its early profits.
On 2019-09-24 there were very large moves.
ALGO is down about 30% on the day. ALGODOOM is up about 300% and ALGOMOON is down 99%: together they have done way better than +-10x; ALGODOOM has in fact gone up 10x as much as ALGO went down, but ALGOMOON is down 99% instead of 300% because it reduced its risk on the way down.
MID has moved down about 13%. MIDDOOM is up about 113% and MIDMOON is down about 92%; each of them performed, roughly, +-10x what MID did.
On the other hand both ALTDOOM and ALTMOON are down today. That's because first altcoins went down a lot--meaning heavy gains for ALTDOOM and losses for ALTMOON. On the way down ALTDOOM continued increasing its short, but ALTMOON took off most of its position to avoid liquidation. Since then, altcoins have recoverd. ALTDOOM lost significantly to this recovery but ALTMOON had already taking off most of its position and so did not recover much.
In general for markets that went down and kept going down--like ALGO--leveraged tokens did very well; for markets that went down and then recovered--like ALT--they did poorly.
So how did leveraged tokens do on average from 2019-09-24 1:30am UTC to 2019-09-25 1:30am UTC?
During this period, BTC was down about 10%, and altcoins were down between 10% and 30%. The average performance of the leveraged tokens, by type:
On average the leveraged tokens had roughly net flat performance. The MOON tokens were down a lot, the DOOM tokens were up a lot, and others were somewhere in between.
But, of course, these moves were not distributed equally: a large amount of the gains came in the DOOM tokens that performed the best, like ALGODOOM and BCHDOOM, while a number of the tokens are down 90% or more.
Remember that, while leveraged token performance will roughly match the target leverage for small moves, the tokens will rebalance after large ones, and at the end of each day; continuously being 10x long is not the same as putting on a 10x long position once and holding it.
For more information, see here.