NatGas KOLD vs BOIL contrary to each other. How & Why?

thecoder

thecoder

Take a look at these two NatGas instruments.
I would have expected a similar move, but they are totally contrary to each other.
How is that possible?

1) ProShares UltraShort Bloomberg Natural Gas (KOLD)
NYSEArca - Nasdaq Real Time Price. Currency in USD
7.35-0.56 (-7.08%)
As of 9:54AM EDT. Market open.

2) ProShares Ultra Bloomberg Natural Gas (BOIL)
NYSEArca - Nasdaq Real Time Price. Currency in USD
63.55+3.96 (+6.65%)
As of 9:54AM EDT. Market open.

Source: https://finance.yahoo.com/KOLD https://finance.yahoo.com/BOIL
 
Last edited:
CET said:
Go read the Fund Summary under Profile for each of these on Yahoo Finance.

https://finance.yahoo.com/quote/KOLD/profile?p=KOLD

https://finance.yahoo.com/quote/BOIL/profile?p=BOIL

They did not pick the best name for KOLD, but it says ultra short in the description. If you don't understand how it works, then don't trade it.
More...

KOLD: The investment seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the performance of the Bloomberg Natural Gas SubindexSM for a single day.

BOIL: The investment seeks daily investment results, before fees and expenses, that correspond to two times (2x) the performance of the Bloomberg Natural Gas SubindexSM for a single day.


Ok, now it makes sense: KOLD is 2x inverse (ie. -2x), and BOIL +2x, of something else (an index or so) as the basis.

Btw, these 2 then are perfect instruments for "contrarians" & for such strategies... :)
Ie. the rise of one means (always) the fall of the other, and vice-versa...
 
Last edited:
You must log in or register to reply here.
Back
Top