Well they just survived probably one of the biggest bull markets...

First 13365 Last

Share
Profile

Follow
swaggytrader

1,455 Posts.

176

18/01/22

22:18

Post #: 58960207
Share
Originally posted by nailsnglue: ↑

BBUS uses exchange-traded futures (derivatives) to provide short exposure to the broad U.S. share market.

From the PDS:
The primary risks associated with the use of such derivative contracts are:
the values of the derivative failing to maintain their expected relationship to movements in the underlying equity index, which may result in the Fund failing to meet its investment objective;
the potential lack of liquidity of the derivative;
the potential to incur substantial losses in excess of the initial amount invested;
the possibility that the derivative position is difficult or costly to manage or reverse;
the Fund may not be able to meet payment obligations as they arise, including any requirements to make margin or collateral payments to the futures clearing broker;
any assets of the Fund held by the futures clearing broker as margin or collateral may be combined with assets of other clients of the broker and held in a single account. Should any client’s trading activity result in a default, then the combined assets in the account may be used by the broker to meet the default;
the counterparties involved in trading derivatives (the central clearing house or the futures clearing broker) may not meet their contractual obligations; and
the electronic platforms on which such derivatives are traded are subject to risks related to system access, varying response times, security and system failure.
Any of the above factors could cause the Fund to incur losses, suffer increased costs, fail to realise gains or otherwise fail to achieve its investment objective.Derivatives will only be used in the Fund for the purpose of establishing exposures consistent with the Fund’s investment objective of generating magnified returns that are negatively.

There are many other risks like the loss purely associated with holding the short versus your index if you had gone long. I would also say that Beatshares has a habit of changing rules at the worst possible time. Example: When oil was trading close to zero, purchased OOO on front month contracts and they effectively swapped (sold) front month contracts for $8 per barrel and bought longer dated contracts for $30 per barrel wiping out any chance of gains which I purchased the investment for. My advice is to read the fine print and also the invisible print too.

Expand

Well they just survived probably one of the biggest bull markets in history, so what does that tell you. A little knowledge can be a dangerous thing.
Value at posting: 2,958.8
Upvote

0 Great analysis

Reply