About the only redeeming feature of the controversial MacroShares Oil Up (UCR) and Oil Down (DCR) ETFs is that they automatically blow up—sorry, are subject to a termination trigger—if the NYMEX Light Sweet Crude oil contract settles over $111 on three consecutive days. The May 2008 contract settled at $111.76 on Monday, and $113.79 Tuesday.
It would only take a 3.5 percent move down—easily imaginable if, for example, the storage report shows an increase in supplies—to let the ETFs live another day. Facing big percentage losses are the holders of DCR; it closed Tuesday at $4.12, a mere 83 percent premium to the NAV at which it will be paid out in the event of the termination event. While that premium is down from over 100 percent on the $5.55 close Monday...
Earlier on NakedShorts:
Kill these ETFs now
Nov. 8 2007
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This article has 1 comment:
- Ames Tiedeman
- 689 Comments
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Apr 16 07:06 AM