Skip to main content

All that glitters -- four new ProShares ETFs

Last week ProFunds debuted four new ETFs that provide short or leveraged exposure to gold or silver. Here are the details:
  • Ultra Gold (UGL) - tracks the Gold Bullion price, London p.m. fix, 200% daily objective
  • Ultra Short Gold (GLL) - tracks the Gold Bullion price, London p.m. fix, -200% daily objective
  • Ultra Silver (AGQ) - tracks the Silver Bullion price, London fix, 200% daily objective
  • Ultra Short Silver (ZSL) - tracks the Silver Bullion price, London fix, -200% daily objective
These ETFs use futures and forward contracts to deliver twice the daily performance of the underlying for the Ultra ETFs and twice the inverse of the underlying for the Ultra Short ETFs on a daily basis.

As was the case with the recent introduction of the Ultra Crude Oil (UCO) and the Ultra Short Crude Oil (SCO), these new ETFs are a bit late in being introduced. The weekly chart below shows that gold peaked way back in March of 2008. Investors would have been glad to have had that Ultra Short Gold ETF around to play that move.

On the other hand, there are many commentators and bloggers who are expecting gold to rocket higher as the U.S. government prints money and issues billions in Treasury bonds to support all the bailouts and stimulus packages. At that point, the Ultra Gold ETF will come in handy.

Weekly Chart of GOLD, 12-09-2008
Below we see a similar picture with respect to silver. It also peaked in March and it is unfortunate the Ultra Short Silver ETF was not available at that time.

Weekly Chart of SILVER, 12-09-2008
It would seem that the Ultra Gold ETF (UGL) is being embraced by investors as volume seems to be growing nicely in the few days since the ETF was introduced. Given the economic backdrop, this particular ETF may indeed turn out to be a real winner.

Disclosure: none
Labels:

Comments

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

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.
Post a Comment
Read more

Time to be conservative with your 401K

Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...
7 comments
Read more