something wrong with AGQ and ZSL

Discussion in 'Stocks' started by gobar, May 12, 2011.

  1. gobar


    AGQ down 12 % while ZSL up only 5 % and SLV down 4 %.. :D
  2. zdreg


    it is your lack of knowledge which is wrong.
    read the prospectuses.
  3. euCartier


    I don't see anything in the prospectus that indicates that kind of underperformance (although I didn't read the full 200 pages cover to cover). I called Proshares and they literally told me it was a huge arbitrage opportunity. No joke. (PS - I know it's not a huge arbitrage opportunity but I couldn't believe they said that and I'm still confused as to how it could underperform by that much in a day).
  4. m22au


    I agree, at first glance, something seems wrong.

    AGQ is -4.55%
    ZSL is -5.8%

    SLV -0.50%
    SI futures down a little bit more.

    Yes, I know about the idea of these ETFs matching daily returns, but the idea that both could be down 4% doesn't make sense.

    I'm off to investigate ...
  5. its because silver is fake
  6. m22au


    AGQ down 9.34%
    ZSL up 0.46%

    SLV down 3.11%

    The ZSL movement doesn't seem right to me - I would have expected it to be up more
  7. m22au


    Case in point: Today the ProShares UltraShort Silver ETF (ZSL) is up 0.5%. That’s a nice surprise, but probably not what most of its investors were expecting considering that the long-only (and non-juiced) iShares Silver Trust (SLV) closed down 3.1%.

    “If somebody bought ZSL at the close yesterday, they would’ve had every reason to expect it to make 6-7% today,” said Anthony Welch, portfolio manager at Sarasota Capital Strategies.
  8. m22au


    I *think* I have an answer.

    The NAV is set at 7am each day.

    At 4pm on Wednesday, silver was at $35.21. ZSL at $21.74

    At 7am on Thursday, silver was at $32.66. ZSL range from 24.00 to 24.90.

    Therefore silver lost 7.24% during that time, and therefore one would expect ZSL (at 7am Thursday) to be 15.48% higher than the price at 4pm on Wednesday.

    21.74 * 1.1548 = 25.10

    At 4pm on Thursday, silver was at 34.12. (up 4.47% from 7am)
    ZSL was at 21.80.

    If we use $24.21 as the price for ZSL at 7am on Thursday, then the 4pm price of 21.80 represents a 9.94% decline (2 * 4.47%).
  9. m22au


  10. that so many thought there was something wrong with the price, is proof of my theorem.

    you know, the one that says 99% of the actors are dingbats.
    #10     May 12, 2011