Discussion in 'Stocks' started by gobar, May 12, 2011.
AGQ down 12 % while ZSL up only 5 % and SLV down 4 %..
it is your lack of knowledge which is wrong.
read the prospectuses.
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).
I agree, at first glance, something seems wrong.
AGQ is -4.55%
ZSL is -5.8%
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 ...
its because silver is fake
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
Case in point: Today the ProShares UltraShort Silver ETF (ZSL) is up 0.5%. Thatâs 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%.
âIf somebody bought ZSL at the close yesterday, they wouldâve had every reason to expect it to make 6-7% today,â said Anthony Welch, portfolio manager at Sarasota Capital Strategies.
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%).
the NAV (at 7am) on 11 May was $18.11
hopefully the NAV for 12 May (at 7am) will be published soon.
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.
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