I have been checking QQQS more and more recently, with Nasdaq breaking records each week.
However I found something interesting, maybe someone has better knowledge to explain.
Now the official page claims:
WisdomTree NASDAQ 100® 3x Daily Short is a fully collateralised, UCITS eligible Exchange-Traded Product. The ETP tracks the NASDAQ-100® 3x Inverse Total Return index, providing three times the inverse daily performance of the NASDAQ-100 TR index, adjusted to reflect fees as well as the costs and revenues inherent to shorting stocks.
So what am I missing here? I understand that QQQS is LSE listed, so it is open on UK market time, so how does QQQS track movement of NASDAQ-100 TR then?
It’s best to think of the “NASDAQ-100” as a product that trades both throughout LSE trading hours and US trading hours. It’s just that most of the volume comes during US trading hours.
Market makers are making prices in the morning (during US premarket, coinciding with LSE trading hours) and even after US markets close (aftermarket trading). Hence, when both LSE and US markets are open, they should move in unison. When LSE is closed and trading goes on in the US, any changes (including overnight news releases) are reflected in the LSE listed product the next day.
Keep in mind that the market makers are usually hedging their holdings in these products using futures products, which trade 24 hours a day.
Over time, you should see that both products do, in fact, move together - despite the trading time differences.