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ETF Splits and Reverse Splits effective Tuesday April 2

Recs

21

March 28, 2013 – Comments (7)

 

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. 

 

7 Comments – Post Your Own

#1) On March 28, 2013 at 11:32 AM, L0RDZ (82.15) wrote:

Thanks  for the  heads up...

 

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#2) On April 03, 2013 at 10:22 PM, NoblyNaive (82.70) wrote:

+1 Rec.

Thank you for this post, bbmaven.  And thank you for taking the time and posting in my lonely lost thread on the same subject!  If you hadn't, I would not have found your very helpful piece.

The real bummer is that I found out because I was going to some of them to close out on (what I expected to be) a +6 gain vs. S&P 500.  Needless to say, I wasn't about to close and lock in 300 and 400 point losses.

Jeff

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#3) On April 04, 2013 at 3:32 PM, slangjargon (< 20) wrote:

CAN YOU OFFER ANY INSIGHT ON SEACUBE (BOX) SELL OE HOLD IDEAS.  THANKS

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#4) On April 05, 2013 at 3:13 PM, bbmaven (100.00) wrote:

Jeff - I was really startled the first time I experienced a reverse split like this.  Glad you found this helpful.  Looks like the CAPS team got everything into the system and the scores corrected today (4/5) so your score should look a lot better today than it did yesterday.

 

bbmaven

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#5) On April 21, 2013 at 9:52 PM, FastMoney316 (98.79) wrote:

my rank is 666 is that bad????

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#6) On April 27, 2013 at 5:43 AM, DrGoldin (99.71) wrote:

#3: Too late for BOX, of course, since the deal was just finalized this week and the stock has been delisted, but something to consider the next time this happens: whether to end your pick or keep it open depends on where you think the broader market will go while you're waiting.  BOX stayed at or near 22.98 for most of the past few weeks because the negotiated sale price was $23 per share.  There was no way you could get significant movement up or down.  So if you thought the market was going to go up (as I did), then of course you'd want to end your pick.  If you thought the market was going to go down, then you'd keep it open, because just by staying at 22.98 it would actually be beating the market.

In REALITY, whether to hold on stocks like BOX, which couldn't possibly drift too far from a price of 23.00, will often depend on your tax situation.

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#7) On May 21, 2013 at 12:52 PM, slangjargon (< 20) wrote:

HELLO BB. JUST LIKE TO ASK WHAT DO YOU THINK ABOUT (RKUS) DO YOU SEE A COME BACK FROM THE GREAT FALL ITS HAD OVER THE PAST FEW DAYS...JUST LOOKING FOR SOME FEED BACK I CAN USE FOR DIRECTION.  THANKS

SJ.

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