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Old 11-19-2016,
Araxanwaype Araxanwaype is offline
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Default $UWTI explanation on upside

I've been looking into UWTI, however I've never bought an ETN. From what I've read, it seems that most people use this for trading.
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Old 11-21-2016,
arkeyuhejapej arkeyuhejapej is offline
 
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I'm wondering if anyone could explain if crude oil went back to $80-90/barrel (2013-2014), why would this not reflect that and go back to up to the $400 dollar mark?
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Old 11-22-2016,
Armandodug Armandodug is offline
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If crude went to 80 a barrel within a week or two you would see a big spike. But you won't see it hit the 400's because there is a drag associated with the product.
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Old 11-23-2016,
ArminExcib ArminExcib is offline
 
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Not sure about UWTI but if it trades CL futures the drag will usually be much more (as they rotate front month futures into back month futures there will be drag whenever there is contango which is normally) than if there are just management fees.
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Old 11-23-2016,
Arokkhpt Arokkhpt is offline
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But ye these products all have a drag that brings them down over time to the point where they eventually have to do a reverse split so holding them for long periods will net a loss vs the product they are holding.
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Old 11-24-2016,
admin admin is offline
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Yup the problem is the drag with any of these instruments, especially when they're levered like UWTI.

Volatility drag makes it so you should only be trading these products. If you want to hold for an extended period of time, you may as well operate in the futures market.

I actually wrote an article explaining the mechanics behind UWTI and the concept of volatility drag here.
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