New ETNs to trade Crude

Discussion in 'Trading' started by NoProblem, Jun 21, 2008.

  1. ETNs (Exchange Traded Notes) trade like stocks and unlike the current ETFs like USO, DIG and DUG, these are supposed to track oil much more exact!

    Here are the new symbols:

    Crude Oil Double Short ETN: (NYSE Arca: DTO)
    Crude Oil Short ETN: (NYSE Arca: SZO)
    Crude Oil Double Long ETN: (NYSE Arca: DXO)
    Crude Oil Long ETN: (NYSE Arca: OLO)

    DTO is only a few days old and I am still doing some due dilly but I believe this is the only "pure play" inverse for the actual oil commodity. Most of my readers are very frustrated if they have a short bias on oil because either USO is to hard to borrow or DUG is a very esoteric etf that does not really correlate purely with oil. How many times is oil down and DUG is down big? That's because XOM or CVX may be "up" that day. Oil stocks lately have not traded in lock step with the underlying commodity. Very confusing, and the average investor thinks he's getting short oil when he or she buys DUG. Only partially. Going forward, this is the one I will play if I want to be short oil. It is still new and the liquidity needs to get a little better. Do your homework and good luck.

    Here is another link that should be useful:

    Happy trades!


    Daily chart of USO - gap still holding as support and the trend is your friend.
  2. Very true.

    On Friday, the DUG was heading higher even though Crude and the USO was +2% as the large integrated oil stocks were getting caught in the sell-off.

    The DUG just doesn't have a very good correlation.
  3. Neeto-beeno! Excessive new product launches usually occur at long-term market peaks. Thanks for the ticker symbols. :cool:
  4. you won't get a K-1 for trading these as you do with USO, right? I stayed away from USO because of the whole partnership arrangement.
  5. mangudai


    A crude ETN. Just what I was looking for. Thanks for the info.