Posted on 02/04/2016 11:48:08 AM PST by Lorianne
This week's roller-coaster ride in the global crude oil market was likely fueled in part by the sudden liquidation of a $600 million leveraged fund bet on falling prices, market sources said on Wednesday.
Unknown investors in the VelocityShares 3x Inverse Crude Oil Exchange Traded Note (ETN) - which offers the ability to make a bearish bet on prices magnified threefold, with gut-churning ups and downs - bailed out early this week after jumping into the fund in January, ETN data show.
Some 1.8 million shares worth more than $602 million were redeemed on Tuesday, the largest outflow from the ETN in the past year, according to data from FactSet Research.
The selloff suggests that at least some big investors are betting that the worst of an 18-month oil market rout is over after U.S. prices fell to $26 a barrel last month for the first time since 2003. Trading activity has also jumped to the highest levels on record
The net asset value of the fund - one of a handful of exchange funds that allows investors to trade oil without the complexity of a futures exchange - fell from close to $1 billion to $417 million on Tuesday and to $322 million on Wednesday, according VelocityShares' website.
(Excerpt) Read more at reuters.com ...
It’s those damn speculators!! Get Maxine Waters on this stat!!
ping
Move the decimal point a spot or three to the left and you could be talking about my 401(k).
All you have to do is look at the speed that the dollar is declining to be able to bet that Oil is going back up.
My guess is that declining dollar has something to do with the Feds propping up the stock market.
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