Boston, MA, 04/21/2014 (usastockreport) – ProShares UltraShort S&P500 (ETF) (NYSEARCA:SDS) has steadily dropped throughout the last week after investors started hedging positions, possibly in expectation of a further drop beyond the 28-29 range it was been floating around in. It was also singled out among ETFs for the big outflow.
ProShares UltraShort S&P500 Fund Performance
ProShares UltraShort S&P500 from ProShares ETFs aims for daily investment results that are -2x times (200% inverse ) of the S&P 500 index, as measured between NAV calculations. Due to the compounding of daily returns, the returns for periods greater than a day may differ in amount and direction as compared to the target return for the period. Investors are therefore required to monitor holdings daily in order to incorporate it into their investment strategies.
Earlier this month, a report suggested that Proshares UltraShort S&P500 is a standout among ETFs because of a $67.2 million dollar outflow for week-over-week shares – a decrease of 4.2%. The share price of SDS has also weakened considerably. Over the last 12 months, it has been trading at in between $27.54 and $45.55.
However, in the last one quarter, it has been flirting around in the 28-29 range, and investors seem divided about whether it’s hot bottom or is headed further down in the coming weeks and months. That’s what all the chatter about SDS boils down to. Those who think it has hit bottom are moving in to take advantage, and their rush is keeping the price from dropping down any further.
Earlier this month, options contracts for ProShares UltraShort S&P500 hit a new three-month record for call contracts, with 3.3 call contracts being traded for each put.
There’s a rebalancing in progress, no doubt. The question is whether the share price stays here or starts going down again.