As I continue my learning about day and active trading, I'm learning about various instruments for tracking underlying commodities or securities. It's become darn right confusing how they all work. Let's start with oil.
A rough set of funds that track oil are OIL, USO, WTI, DXO, DTO, IYE, DUG, DIG, SCO, XEG
"WTI" - acronym for West Texas Cruide, not the WTI ticker symbol.
OIL (iPath S&P GSCI Crude Oil Total Return Index ETN) - track WTI
USO (United States Oil Fund) - track WTI
DXO (Powershares DB Crude Double Long ETN) - 2x WTI and is reset every day.
DTO (Powershares DB Crude Double Short ETN) - 1/2x WTI
DIG (ProShares Ultra Oil and Gas) - 2x Dow Jones U.S. Oil & Gas Index
DUG (ProShares Ultra Short Oil and Gas) - 1/2x Dow Jones U.S. Oil & Gas Index
SCO (ProShares Ultra Short Oil) - 2x The Dow Jones--AIG Crude Oil Sub-Index
IYE (iShares Dow Jones Energy Index ETF) - 1x DJ Energy Index (Exxon, ChevronTexaco, etc)
XEG (Canadian TSX Energy Index ETF) - 1x TSX Energy
Now I have no idea which funds track oil or the inverse better. I noticed *A LOT* of discrepancies in the tracking that I wasn't expecting. things like Crude + 4%, DIG + 3%, DUG - 20%, XEG -5%.
ETNs are Exchange Traded Notes which are different from ETFs, primarily in taxation reasons and closer tracking of index (pro) and assumption of credit risk of the issuer (con).
I think I'll move away from DIG and DUG and into DXO and DTO to more accurately capture crude's movement. None of these instruments are perfectly designed, and may even be terrible at tracking. One article is particularly scathing in criticism of DUG's tracking of IYE.
A rough set of funds that track oil are OIL, USO, WTI, DXO, DTO, IYE, DUG, DIG, SCO, XEG
"WTI" - acronym for West Texas Cruide, not the WTI ticker symbol.
OIL (iPath S&P GSCI Crude Oil Total Return Index ETN) - track WTI
USO (United States Oil Fund) - track WTI
DXO (Powershares DB Crude Double Long ETN) - 2x WTI and is reset every day.
DTO (Powershares DB Crude Double Short ETN) - 1/2x WTI
DIG (ProShares Ultra Oil and Gas) - 2x Dow Jones U.S. Oil & Gas Index
DUG (ProShares Ultra Short Oil and Gas) - 1/2x Dow Jones U.S. Oil & Gas Index
SCO (ProShares Ultra Short Oil) - 2x The Dow Jones--AIG Crude Oil Sub-Index
IYE (iShares Dow Jones Energy Index ETF) - 1x DJ Energy Index (Exxon, ChevronTexaco, etc)
XEG (Canadian TSX Energy Index ETF) - 1x TSX Energy
Now I have no idea which funds track oil or the inverse better. I noticed *A LOT* of discrepancies in the tracking that I wasn't expecting. things like Crude + 4%, DIG + 3%, DUG - 20%, XEG -5%.
ETNs are Exchange Traded Notes which are different from ETFs, primarily in taxation reasons and closer tracking of index (pro) and assumption of credit risk of the issuer (con).
I think I'll move away from DIG and DUG and into DXO and DTO to more accurately capture crude's movement. None of these instruments are perfectly designed, and may even be terrible at tracking. One article is particularly scathing in criticism of DUG's tracking of IYE.
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