MarathonMike
Diamond Member
I've been interested in oil futures so I bought some shares of two oil ETFs that are theoretical inverses of each other: Proshares ultra short 3x ETF called OILD and Proshares 3x ETF OILU. I noticed that the two funds basically track each other but not exactly. For example on a typical day OILU might be between 3-5% up and OILD might be 3-5% down but what I discovered is the net between to two funds is almost NEVER zero or positive.
The net typically (based on the 4 days I held) was about a negative half percent but ranged between 0 and -1.0%. That isn't what I expected and although I closed out the positions with a slight gain that was based on selling into momentum rather than what I expected which was to sell when the net was about 1% positive. The largest I saw the positive net between the two was about .5% and that lasted less than a minute. I would say 99% of the time the net between the two was negative. Can anyone explain this? If you are not knowledgeable you can certainly drop a dookie on my thread but I would rather hear from someone who knows what they are talking about. Thanks.
The net typically (based on the 4 days I held) was about a negative half percent but ranged between 0 and -1.0%. That isn't what I expected and although I closed out the positions with a slight gain that was based on selling into momentum rather than what I expected which was to sell when the net was about 1% positive. The largest I saw the positive net between the two was about .5% and that lasted less than a minute. I would say 99% of the time the net between the two was negative. Can anyone explain this? If you are not knowledgeable you can certainly drop a dookie on my thread but I would rather hear from someone who knows what they are talking about. Thanks.
