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BetaPro Natural Gas Leveraged Daily Bull ETF T.HNU

Alternate Symbol(s):  HNUZF

HNUs 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 Percentage the daily performance of the Horizons Natural Gas Rolling Futures Index the Underlying Index, Bloomberg ticker CMDYNGER. HNU is denominated in Canadian dollars. Any US dollar gains or losses as a result of HNUs investment are hedged back to the Canadian dollar to the best of its ability. The Fund To be successful in meeting its investment objective during the period, HNUs net asset value should have gained up to two times as much on a given day, on a percentage basis, as its Underlying Index rose on that given day. Conversely, HNUs net asset value should have lost up to two times as much on a given day, on a percentage basis, as its Underlying Index declined on that given day.


TSX:HNU - Post by User

Comment by GerritEtmanson Jun 05, 2015 9:30am
129 Views
Post# 23800121

RE:RE:RE:Just need this at $7 to break even

RE:RE:RE:Just need this at $7 to break even
Pawnstar:  It appears that you do not understand how leveraged ETFs work.  Please be not offended if I give you a quick primer.  It will save you money in the future.  These leveraged ETF are trading vehicles, not stocks to be held for months.  Typical holding periods are hours, sometimes days.  If you hold it for longer than two weeks, you almost certainly will lose.  Now to the way they work.
Right now, nat-gas is at $2.60.  The ETF is at 3.30.  Let's assume that nat-gas falls by 5% to $2.47.  The ETF will fall by twice that percentage, so it will hit $2.97.  Now, nat-gas goes back to $2.60.  That's an increase of 5.263%.  Consequently, the ETF goes up by twice this percentage, namely 10.526%.  It therefore reaches $3.2826.  NOT $3.30!!  You see now, that over time, your ETF will lose value with every swing.
I implore you: read the ETF prospectus from front to back before you buy another one.
You are welcome.
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