why DGAZ down -4.5% while UGAZ only up 1% on Dec.1?

[trend2009]

on Dec.1 at the market close, I noticed that DGAZ went down -4.5% while UGAZ went up only 1%. since they are inverse 3x leveraged long and short ETF pairs, they should move at the same amount in different directions. anyone know what happened that they did not move that way on Dec.1?

 

[SteveM]

Did one of them possibly have a reverse-split on that date?

I do know that if you watch these 3X inverse ETF pairs like a hawk, occassionally you will find arb opportunities. Mostly during the wee hours between 4-7 AM eastern. I made a thread about something similar once:

https://www.elitetrader.com/et/thre...de-spread-between-nq-futures-and-sqqq.334814/

 

[trend2009]

Did one of them possibly have a reverse-split on that date?

I do know that if you watch these 3X inverse ETF pairs like a hawk, occassionally you will find arb opportunities. Mostly during the wee hours between 4-7 AM eastern. I made a thread about something similar once:

https://www.elitetrader.com/et/thre...de-spread-between-nq-futures-and-sqqq.334814/

there is no reverse split. i guess there could be dividend distribution on dgaz?

 

[guru]

Dec 1 was a Sunday and the market was closed.
On Dec 2nd DGAZ went down -7.68% while UGAZ went up 8.34%.
I don’t see anything happening at the market close, though NAV could be rebalanced while bid/asks may be too wide and inaccurate after market close.
So not really sure what you’re referring to.

 

[guru]

Wait, I’m looking at Yahoo that shows pre-market -7.68%/+8.34%, which is probably overnight movement since/after Dec 2 market close.
Will take a look at yesterday’s numbers later.

 

[trend2009]

Dec 1 was a Sunday and the market was closed.
On Dec 2nd DGAZ went down -7.68% while UGAZ went up 8.34%.
I don’t see anything happening at the market close, though NAV could be rebalanced while bid/asks may be too wide and inaccurate after market close.
So not really sure what you’re referring to.

it should be dec.2. i made mistake on the date.

 

[destriero]

Don’t mind Trend... two of his twenty servers were down and that low vol on Sunday messed with his model.

 

[guru]

So here are the numbers I'm getting, looking only at open/close on Dec 2nd and open today Dec 3. Didn't check after-hours as things can get out of whack when the market closes.
Overall the numbers/% between DGAZ and UGAZ looks very close:

 

[trend2009]

So here are the numbers I'm getting, looking only at open/close on Dec 2nd and open today Dec 3. Didn't check after-hours as things can get out of whack when the market closes.
Overall the numbers/% between DGAZ and UGAZ looks very close:
View attachment 214550

i think it should compare dec. 2 close with nov.29 close instead of close/open.

 

[guru]

Ah, wasn't sure which period you were referring to. Here is Nov 29 close vs Dec 2 close, still very similar. Small discrepancies may occur due to NAV inaccuracy and nightly rebalancing.

Also keep in mind that they will get misaligned over more than 1 day due to geometric compounding (or whatever it's called). Basically if you start both of them at $100 and one goes up 10% to $110 and then down by 10% then it will end up at $99. While at the same time the other one will move down by 10% to $90 and then up by 10%, also to $99. This way they both lose 1%, even though seemingly moving in opposite directions.
This is the reason why all leveraged ETFs decay over time and can't move exactly in opposite.