INVERSE ETFs BEAR, BBOZ, BBUS Here I go at trying to explain BBUS as I was also bewildered by the smaller profits that I made compared to my expectations. As I explained in an earlier post, that (1) BBUS is underperforming with a current porfolio exposure of -188.5%, compared to the expected -200% to -275%. As a results, the swings in the US S&P 500 Futures are not returning gains as we may expect.
Last Friday based off the big swings in the US markets, we saw the NAV ( net asset value) according to their website sitting at $4.20, however the share price of the ETF closed up on $4.90 seeing an over-evaluation of the ETF pricing on closure of trade of 70cents. This means that due Monday it was due for a correction, however we saw SP up even higher again given the S&P 500 Futures in red territory but by not much, but this was due to the 70c gap in true value of the asset and the market share price.As a result the BBUS on Monday, although after seeing one of the biggest drops overnight, provided a much smaller return (on Tuesday Morning), this being due to the 70c over-evaluation and lower current portfolio exposure of only -188.5%.
Yes, I too was expecting 20% swings on this stock this morning haha, but after doing some digging I have come to this conclusion IMO and though I would just share it with others who may be equally confused.
Take away notes:
I like BBOZ more or even BEAR over BBUS, same idea applies for these ones
Look at the NAV values (truer value compared to SP price) and match up with the ETF price to see the evaluation
Look at the portfolio exposure as well and see if the ETF’s short exposures are within range.good luck everyone and hope this helps some people
good luck everyone and hope this helps some people not financial advice
