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BetaPro Crude Oil Leveraged Daily Bull ETF T.HOU

Alternate Symbol(s):  HROZF | HZOZF

HOU¿s investment objective is to seek daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to up to two times (200%) the daily performance of the Horizons Crude Oil Rolling Futures Index. HOU is denominated in Canadian dollars.


TSX:HOU - Post by User

Post by Drake1234on Apr 22, 2020 10:42am
238 Views
Post# 30938815

NAV was $0.37 at beginning of day

NAV was $0.37 at beginning of dayI think there is a misunderstanding of how this stock works. The NAV was slaughtered yesterday (fell from $2.88 to $0.37 per share) on account of the deep drop in June WTI futures coupled with leverage. Now that HOU is not levered, I think June WTI (which will roll to July WTI at beginning of May) will need to double a least twice just to get back to even with where the market price is right now.  

I think people are thinking about this stock intuitively, i.e. if oil goes up, the stock will go up. But that's not how it works.  You're not just paying a premium for oil exposure here, but paying a multiple for it! Strongly consider selling now while the market is dislocated. The market price will catch up to NAV.   Don't rely on the market being efficient. I made this mistake yesterday. Please correct me if I'm missing something, but I don't think I am.
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