I donāt know. When things get so unusal like the oil price/movments are at present there are things happening behind the scences we as ordinary investors know nothing about. So is it related to the contago maybe maybe not! Its a balance of either being too early if price keeps moving lower or of missing out if price makes a quick rebound. Remember, be carful, focus on Risk Risk Risk.
Quoted from WisdomTree
The contracts being purchased may be
more expensive than the contracts being sold which would cause an investor in
commodity futures to make an additional loss. This market trend is known as
ācontangoā. Alternatively the contracts being purchased may be cheaper than the ones
being sold which would result in an additional gain, known as ābackwardationā. This
price difference is commonly referred to as āroll yieldā. As the roll yield is incorporated
into the calculation of the value of the Index, it may therefore have a positive or
negative impact on the value of the Index depending on whether there is contango or
backwardation. The ETC will also be affected as its value is based upon the value of the
Index.
This may make more sense to the price fluctuations I believe.
Thank you for this info and helpā¦
Thank you Adm! But I donāt understand: WTI is up (+21%) and Wisdom tree is down 7,76%ā¦the other big fund USO is down only -0,4%ā¦if it was only for Contango, both the ETC should be down similarly!