WTIDUBS ETRACS - ProShares Daily 3x Inverse Crude ETN
WTID Fund Description
The UBS ETRACS — ProShares Daily 3x Inverse Crude ETN provides daily -3x inverse exposure to an index of WTI crude oil futures contracts.
WTID Factset Analytics Insight
Like most geared products, WTID is intended as a trading tool, not a buy-and-hold investment. The note provides -3x exposure to its index for a one-day period. The daily reset function means investors holding WTID for longer periods are exposed to the effects of compounding, and could see returns that vary greatly from -3x exposure. WTID’s Bloomberg index tracks oil futures contracts that are rolled every other month, striking a balance between spot-price sensitivity, turnover, and contango effects.
As an ETN, WTID is backed by the credit of UBS, rather than futures and cash as in a commodity pool structure. Also, investors get a 1099 at tax time instead of a K-1. WTID is expensive to hold, but trading cost matters more for this tactical tool. Also consider Citigroup’s DWT, a direct competitor, or ProShare’s SCO, a -2x crude oil fund which uses a commodity pool structure. WTIU is WTID’s 3x long counterpart, while OIIL from Credit Suisse tracks the same index without leverage.
WTID CHARTS AND PERFORMANCE
WTID Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of WTID. WTID is rated a N/A out of 5.
Options Strategies for Outcome Investing
A collar strategy is a protective option strategy constructed by writing a call and buying a put with the same expiration date while being long the underlying security.
A covered call is an income strategy constructed by writing a call option against a holding of the underlying security.