Anyone who knows me and discusses investments knows that I distrust EFT's immensely. This is for 1 simple reason. I do not know what they are. Yes, I know they are funds that trade like stocks, but still...
Today let us look at ProShares Trust II. (UVXY)
http://www.google.com/finance?q=NYSEARCA:UVXY
From the website:
ProShares Ultra VIX Short-Term Futures ETF seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to twice (2x) the performance of the S&P 500® VIX® Short-Term Futures Index.TM
As far as I can tell, the ETF started trading in October 2011 for at $244. On March 8th, it reverse split 1:6 (If you had 6 shares, they were now 1 share for 6 time the March 7th price of $5.00).
Currently the ETF is trading at $21.60.
Here is the part that caught my attention. The Dec 2012 option price for a $22.00 strike is $10.00. This means that the price would have to drop below $12.00 to lose money.
This should be fun to watch.
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