PowerShares DB Crude Oil Dble Long (NYSEMKT:DXO.DL)

CAPS Rating: No stars


Player Avatar anchak (99.86) Submitted: 12/26/2008 10:25:41 AM : Underperform Start Price: $1.80 DXO.DL Score: -94.34

I have a bad feeling that this Leveraged ETF may very well get "liquidated"

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Member Avatar goldminingXpert (29.55) Submitted: 12/30/2008 3:05:40 PM
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what terrible timing. 0 all-stars red thumb this as it drops from the double-digits and then you come in and nail the low. Sometimes the CAPS community is useless... this is eventually going to 0, as all double-anythings will... but it is probably headed to 3 and change first.

Member Avatar anchak (99.86) Submitted: 12/30/2008 3:24:48 PM
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GMX...This is a hedge... I have shorts on DTO and long on SCO ( which given its starting value - and as you acknowledged , leveraged ETFs timing is everything) have good chances for survival......DXO at around $2 is a heck of a risk.I view it as such and really doesn't matter whether the timing was perfect or not....also Oil may very well see a sub/around $30 day

Member Avatar anchak (99.86) Submitted: 1/2/2009 12:34:03 PM
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Kudos to GMX on an awesome call..... DXO breached $3.00 today....if any of you are invested in DXO ..I suggest.....trading it in for UCO...essentially same ETF but much better chances of survival....and correction in the above post...shorts on both DTO and SCO and LONG UCO.

Member Avatar nihilkillsmemore (20.61) Submitted: 1/7/2009 4:23:02 AM
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I didnt know u could short an etn

Member Avatar sdcougar (< 20) Submitted: 1/13/2009 5:55:35 PM
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This is not an ETF, but rathter an ETN, which has its own dangers.

Member Avatar sdcougar (< 20) Submitted: 1/13/2009 5:58:53 PM
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Keep seeing this described as and ETF. It is an ETN.

Member Avatar anchak (99.86) Submitted: 1/13/2009 11:02:05 PM
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You are right of course ...essentially adds counterparty risk on top of everything ...which is the reason I prefer UCO - which is an ETF

Member Avatar anchak (99.86) Submitted: 1/13/2009 11:02:34 PM
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As a lesser of 2 evils

Member Avatar privateefire (< 20) Submitted: 3/5/2009 7:14:30 PM
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I don't quite understand why DXO would get liquidated. Also what does that mean for an investor who bought this fund when the price was $1.80 and at the time of liquidation the price was at $3? Furthermore, why is an ETN more likely to get liquidated then an ETF? Thank you in advance, Chris.

Member Avatar ipfmanager (97.21) Submitted: 3/5/2009 10:36:32 PM
Recs: 0

I would like to know this too.

Member Avatar nihilkillsmemore (20.61) Submitted: 3/13/2009 5:31:27 AM
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well you have to understand etn stands for exchange traded notes. exchange traded notes are derivatives/debt instruments that are unsecured by the underwriter and correct me if I am wrong but the bank that underwrites this ETN is doutche bank AG. See the systematic problem arises when The bank gets downgraded by rating agencies and that causes fear in the debt instrument because it is not secured(causing a run in dxo), if AG goes belly up the debt holders are screwed and if the underlying commodities drops more than I believe 20% any given month, all position will be liquidated. This has tax advantages compared with etf, but etf actually have stock in their portfolio while this has nothing

Member Avatar anchak (99.86) Submitted: 3/13/2009 9:45:44 PM
Recs: 0

Couldn't have said it better....Thanks!Read up on the Lehman ETNs and you'll know....

Member Avatar LuckyStrike88 (< 20) Submitted: 9/10/2009 5:28:43 PM
Recs: 0

Wow nice call OP, I bought 550 shares of DXO at 4.15 and told myself I would sell at 5 it flirted with it a couple times but never reached that mark. I am still waiting to see how much I get from these shares since I am told they will pay out in NAV instead of market value. I realized it was a risky vessel, but being extremely bullish on the future of oil it was the best thing I could find to make money when oil went up. Play with fire and get burned I reckon.

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