ProShares Announces ETF Splits: Volatility Fund to See 1-for-5 Reverse

TigerFox

By Chris Dieterich

The market’s largest provider of geared exchange-traded funds last week announced a slew of splits and reverse splits that take effect in the weeks ahead.

That means it’s time again for investors to take inventory on whether they own too much of these fast-moving funds.

One fund on the list that stands out is an ETF that is particularly popular with traders who deal in fear, meaning the CBOE Volatility Index, or VIX.

The ProShares Ultra VIX Short-Term Futures ETF (UVXY) will undergo a 1-for-5 reverse split that takes effect at the opening bell on May 20. Holders get one share of the ETF for every five they own.

Splits and reverse splits are forms of housekeeping by ETF providers. The splits will not change the value of a shareholder’s investment, but traders don’t want a fund that’s too pricey, or too cheap. In the case of UVXY and eight other ETFs, shares were getting too cheap.

While spits are generally a wash economically, fractional shares that can lead to unplanned gains (or losses) and, thus, unplanned tax events. This blogger noted the phenomenon in the Barron’s print segment a while back.

Twelve other funds, including the ProShares Ultra Nasdaq Biotechnology ETF (BIB), are undergoing 2-for-1 stock splits. For these, prices have gotten awful high. BIB’s shares are up 22% this year to $153.

As Barron’s has noted previously, getting caught in a split provides a chance to reflect about whether you’re holding these zippy funds longer than you should. More to the point: why are you trading leveraged ETFs at all?

The ProShares volatility ETF is already down more than 60% during 2015. In fact, this blog noted an unusually hefty options trade that profits if UVXY falls much, much more. And guess what? That trade is making money!

http://blogs.barrons.com/focuson ... arrons&ru=yahoo

oda

UVXY will be pumped up. Let,s see thanks you inform

恒一

Yang will also have a reverse split on May 20th.

1:5 for UVXY will save me some commission costs in IB.

恒一

RUSS will also have a reverse split on May 20th.

Lufthansa

恒一 发表于 2015-5-9 10:10 PM
Yang will also have a reverse split on May 20th.

1:5 for UVXY will save me some commission costs ...

UVXY每年都起码split一次吧？

对了，中国突然又降息了，那个gap周一怕是不补了，又得套几天吧？

恒一

Lufthansa 发表于 2015-5-10 08:54 AM
UVXY每年都起码split一次吧？

对了，中国突然又降息了，那个gap周一怕是不补了，又得套几天吧？

A few days ago, many people were talking about China's rate cut. I had a plan:

I planned to buy some ASHR related stocks on Friday, but it was up over 2%, so I cancelled my plan.

恒一

Lufthansa 发表于 2015-5-10 08:54 AM
UVXY每年都起码split一次吧？

对了，中国突然又降息了，那个gap周一怕是不补了，又得套几天吧？

I bought some SDOW at $18.17 before the closing. If Monday is a range day, I can get out.