Skip to main content

Eight new ProShares ETFs - what they're all about

A batch of new ProShares ETFs became available today. The ProFunds company announced that 8 new ETFs began trading today and that 4 more will soon be available.

As can be expected with ProShares, there is a mix of ultra and ultra short ETFs. The ultra ETFs offer twice the performance of the underlying index on a daily basis while the ultra short ETFs offer twice the inverse performance on a daily basis.

The new ETFs fall into two categories: commodities and currency.

The new commodity ETFs --

In the commodity sector, ProShares currently offers the Short Oil & Gas ETF (DFG), the Ultra Oil & Gas ETF (DIG) and Ultra Short Oil & Gas ETF (DUG). They have now added the following four ETFs:
  • Ultra DJ-AIG Commodity (UCD) - based on the Dow Jones-AIG Commodity Index
  • Ultra Short DJ-AIG Commodity (CMD) - based on the inverse of the Dow Jones-AIG Commodity Index
  • Ultra DJ-AIG Crude Oil (UCO) - based on the Dow Jones-AIG Crude Oil Sub-Index
  • Ultra Short DJ-AIG Crude Oil (SCO) - based on the inverse of the Dow Jones-AIG Crude Oil Sub-Index
In looking at the documentation, it appears that the crude oil ETFs use futures to generate their returns. The commodity ETFs seem to use swaps.

The composition of the underlying commodity index is as follows:
  • Energy 35.09%
  • Precious Metals 10.19%
  • Industrial Metals 17.79%
  • Livestock 8.50%
  • Grains 19.15%
  • Softs 9.28%
The new currency ETFs --

Currency trades have been big in the news lately as the U.S. dollar has rallied strongly and the Euro has plunged. The following ETFs provide a leveraged way to play the currency trade and have been eagerly awaited by many investors:
  • Ultra Euro (ULE) - twice the EUR/USD daily price change
  • Ultra Short Euro (EUO) - twice the inverse of the EUR/USD daily price change
  • Ultra Yen (YCL) - twice the JPY/USD daily price change
  • Ultra Short Yen (YCS) - twice the inverse of the JPY/USD daily price change
These ETFs seem to primarily use forward contracts to generate their returns though the documentation boilerplate lists swap agreements, forward contracts, and futures and options contracts.

All of these ETFs did trade today with the Ultra Crude attracting the most volume: a meager 8,210 shares. Note that Yahoo! Finance has not yet figured out that the symbol SCO is now the Ultra Short Crude Oil ETF. I'm sure these ETFs will eventually be embraced by investors but for now, be careful of low volume (read "ProShares ETFs - why trading volume makes a difference").

Coming soon are gold ETFs and silver ETFs in the usual ultra and ultra short varieties.

Disclosure: none
Labels:

Comments

Speedmaster said…
Did you see this? Ouch. ;-)

http://www.bloggingstocks.com/2008/11/25/citigroup-makes-a-50-000-donation/
November 27, 2008 at 7:14:00 AM EST
TradeRadarOperator said…
Citi just can't do much right these days...
December 3, 2008 at 11:08:00 PM EST

Post a Comment

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation
4 comments
Read more

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve
1 comment
Read more

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional
4 comments
Read more