What exactly is supposed to be inversed here? Initially i thought it was the s&p 500 (US) stocks but i searched the names given in the screenshot online and I was told it was 500 UK companies, however this leveraged fund wasn’t trading yesterday while UK stocks were, so i then considered it being a leverage against the German dax but this only 30 firms and comparing today’s Dax rise to the 2x leverage decline the math doesn’t add up. So what exactly does this fund inverse?
Thanks!
https://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000NPYI
It does invert the S&P 500.
When S&P 500 goes down, price of this ETF goes up.
It begins trading before the s&p begins and ends before the s&p ends, not to mention the increases and decreases don’t match up to the 2x leverage, how does that work?
I see, how does it inverse when they’re traded at different times?
I can’t imagine it would be traded with a days lag because then people could exploit the leveraged fund for days the spy goes down (for the next working day for the leveraged fund)
There is nothing untoward about that. This is true of many other ETFs also. VUSA, IUSA, IITU all trade in the UK morning before the US market opens, as do the S&P 500 futures. When US market is closed investors/traders are speculating on what S&P 500 index will be once trading in its constituents is next active.
Really? That’s kinda odd, doesn’t that mean it’s possible the two funds could go in the same direction one day?
Thanks for the help
Not really. If VUSA and this inverse ETF were to move in the same direction then there would be an opportunity for free money through arbitrage. Computers would spot this opportunity and prices would very quickly adjust.
