Wt Wti Crude 2x Discussion Threads

[laptop15] 22/4/2020 15:55

Its showing 22% explain that as I would love to know why when oil is up?

[marceau] 22/4/2020 15:50

It was up 30% from the open, exactly tracking the 15% rise in the index before the futures began to turn down, so it is performing just as expected. Apart from the opening value, yesterday's WTI price means NOTHING in this instrument, you must understand this or you'll keep losing money.

[kirk 6] 22/4/2020 15:31

Exactly how I feel seems to track the underlying when going down but any upward move nothing here

[laptop15] 22/4/2020 15:20

Why isn't this rising?? I rose previously when oil rose. Not it's like there is an overhang of desperate seller trying to get out. This should be over 2.00 today

[marceau] 22/4/2020 15:06

kirk6, if it's any consolation, LOIL isn't in anywhere near as vulnerable as USO, which is open today, trading in complete ignorance of the risks and filled to the brim with retail money that has no clue about the nature of the trade they are making. If you want to see panic, come back to USO at rollover if the front WTI contract doesn't get back above $20.

[thelongandtheshortandthetall] 22/4/2020 15:00

Donald J. Trump
@realDonaldTrump
·
1h
I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.


I expect the oil price will be alright now..

[marceau] 22/4/2020 14:45

TLTSATT, hah, was just reading my old posts. Guess I'm just addicted to giving out unheeded warnings. Oh boy was I right back then.

[thelongandtheshortandthetall] 22/4/2020 14:24

marceau
Other than posting here today you haven't posted since 2008.. Where have you been :)

[marceau] 22/4/2020 14:12

In summary, WTI is volatile beyond belief: with historic losses, massive contango and acknowledged storage issues; all at a time with unprecedented global demand destruction. The biggest WTI ETF suspended yesterday, and may be completely bust within 2 weeks. The firm who provide LOIL suspended one of it's own (short!) WTI funds overnight and forced redemption on investors. The structure of LOIL guarantees losses over time, meaing you cannot buy and hold, and the daily opening price is dependant on opaque factors which are set during volatile out of hours trading. Is the risk/reward really worth it?

[marceau] 22/4/2020 14:03

Kirk, no problem. The key here is the complete detachment from WTI price. LOIL comes from MOVEMENT in price, tracked by an index, then leveraged 2x and reset every day. What a certain percentage rise in WTI spot, WTI futures all along the curve, the Bloomberg index or anything else associated with the market did to the price of LOIL yesterday isn't what it will do today. The LOIL price is completely untethered from anything but itself, that's what makes it dangerous. Reference market makers, they only 'set' bid/offer to draw in buyers and sellers around the price set by the index. Buyers/sellers/MMs don't have the impact on price in this like they do in something like USO.

[kirk 6] 22/4/2020 13:49

Appreciate your comments and info by the way Marc and yes I will take it up with wisdomtree.Thanks

[marceau] 22/4/2020 13:43

Kirk, take it up with Wisdomtree, sorry for your losses.

[kirk 6] 22/4/2020 13:38

This went up 2 days ago from 1.42 low to 1.9 on the back of oil prices rising intraday so that is a fact. So today same logic oil prices and underlying rises intraday - this should rise (intraday) hasn't happened

[kirk 6] 22/4/2020 13:29

Saying that Peel and flow have gone ??? They were making prices an hour ago

[kirk 6] 22/4/2020 13:28

Even the market makers peel and flow are up on the order book through direct market access so they themselves are creating a price.The index was at this level yesterday and the LOIL etf was ~1.85 that's what I don't understand. Yes I understand gaps and trade them everyday on loads of stocks however I would have expected LOIL to fill the gap based on the recovery of the underlying

[marceau] 22/4/2020 12:54

Kirk, I believe another Wisdomtree ETC was suspended last night due to exactly this issue. The readjustment you are talking about is managed on an AFAIK unpublished criteria, with out of hours moves hedged by Wisdomtree. They forced redemptions in their 3 x short etc overnight presumably because they couldn't manage the swaps to cover the size of the gaps down. Yet another reason not to use these for buy and hold.

[kirk 6] 22/4/2020 12:30

If it readjusted each day then surely there would be huge gaps each day ? I don't understand the readjustment - so if oil was up a lot over night it would readjusted much higher? I get the fact of trading intraday but this is a stock and there are real dma orders so if it readjusted each night then there would never be any buy orders in the afternoon as no one would want to lose each morning

[saltaire111] 22/4/2020 12:17

If you want to gain long exposure to oil, the safest way (if there is a safest way) is to buy stock in the major oil companies - shell BP, XOM etc. That way you get paid decent divis while you wait for the capital appreciation to kick in with a higher price of oil.

[stevieweebie2] 22/4/2020 11:46

sorry scratch the last bit I meant next day.