ETF Splits and Reverse Splits effective Tuesday April 2
CAPS players who have picks on 16 ETFs will awake Tuesday morning to some exotic CAPS scores. It will take a few days for the crack CAPS team at TMF to get these into the system - and it always seems to cause our fellow players a great deal of anguish. If you are prepared for it, you won't feel that surge of "panic" and can be confident that the score adjustments will come over the following week - but perhaps not as quickly as your sense of order in the world seems to demand. The CAPS team hasn't blown one of these yet to my knowledge - so have confidence it is a temporary phenomenon.
At Monday's close, the following ETFs will experience a reverse split:
Direxion Daily Energy Bear 3X Shares (ERY) 1:6
Direxion Daily China Bear 3X Shares (YANG) 1:5
Direxion Daily Emerging Markets Bear 3X Shares (EDZ) 1:5
Direxion Daily Technology Bear 3X Shares (TECS) 1:5
Direxion Daily Gold Miners Bull 3X Shares (NUGT) 1:5
Direxion Daily Financial Bear 3X Shares (FAZ) 1:4
Direxion Daily Small Cap Bear 3X Shares (TZA) 1:4
Direxion Daily Mid Cap Bear 3X Shares (MIDZ) 1:3
The following ETF’s will undergo a forward split:
Direxion Daily Financial Bull 3X Shares (FAS) 3:1
Direxion Daily Retail Bull 3X Shares (RETL) 3:1
Direxion Daily Emerging Markets Bull 3X Shares (EDC) 3:1
Direxion Daily S&P 500 Bull 3X Shares (SPXL) 3:1
Direxion Daily Real Estate Bull 3X Shares (DRN) 2:1
Direxion Daily Latin America Bull 3X Shares (LBJ) 2:1
Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD) 2:1
Direxion Daily Small Cap Bull 3X Shares (TNA) 2:1
So, if you are short TZA, you will temporarily lost about 300 points if your pick was fairly recent. If it is a longstanding pick, the loss will be considerably less. On ERY, the loss could be around 500 points on a fairly recent pick. If you are long the picks in the second chart, you will also suffer some temporary losses, but not as extreme as the shorts on the reverse splits.
On the other hand, if you are long the ETFs in the first chart and/or short the ETFs on the second chart, you will have major gains on Tuesday morning – but they will prove to be illusory.