Board, please...There are some on here that get it, and some that don't...although they will continue to argue!
Up until yesterday HOU was always valued at the price of their underlying inventory. If that underlying inventory (futures contract) went up or down HOU leaveraged so it did the same 2X. It also adjusted via subscriptions to help off set trading bias. This was a daily event, and each day taken in isolation, all this held true. Over multiple days, fees, volatility and the shape of the futures curve produced a performance number that won't match the same time period performance of the underlying contract.
Yesterday, this broke!! No more subscriptions resulted in the price of HOU no longer reflecting the movements of the underlying assets. Trading bias took over and as a result HOU was now priced at a premium to its true value. Many warnings have been given!! At some point management will hopefully restart the old process and this will result in HOU resetting from premium priced units to true value.
Yesterday, if things where continuing to work like they have for the past, forever. HOU should have been at $0.37 at 2:30 and $0.72 at 4:00. This is still holding June oil until 2:30, then it will switch to July and I guess no more leaverage (1X instead of 2X). After 2:30, the price of HOU in normal times would have continued to then move, based on July price movements. There is no change in dollar value at these roll overs, just future decay caused by the spread between July and June contracts. We will own less inventory then now.
The current difference between where HOU should be and where it is, is the premium due to the brake down of the etf. There will be a reconcilliation at some point in order for this etf to return to normal operations.
Right now June oil is $14.48 up $1.37 from yesterday at 4:00. HOU should have been at $0.72 at 4:00 yesterday, if things hadnt broke.
Therefore current HOU value is at 2X should be $0.87.
Therefore, HOU right now is $1.71 so the premium because of the brake is $0.84 per share.