VelocityShares’ risky triple-leveraged oil notes find new life


A volatile oil play popular with millennial investors found new life Thursday, with two new exchange-traded notes announced just as the originals were delisted.

While Credit Suisse
CS,
+1.33%
  deslisted the VelocityShares 3x Long Crude ETN
US:UWTI
 and VelocityShares 3x Inverse Crude Oil ETN
US:DWTI
  on Thursday, moving them to a less accessible over-the-counter market, VelocityShares said Citigroup
C,
+0.76%
  would launch two nearly identical products starting Friday: the VelocityShares 3x Long Crude Oil ETN (UWT) and VelocityShares 3x Inverse Crude Oil ETN (DWT).

Despite their similarities, the new notes are entirely separate products. VelocityShares, which is owned by Janus Capital Group Inc.
US:JNS
 , said Credit Suisse “is not involved in any way” with the new notes.

“For years we have worked with sophisticated investors who want to utilize daily trading tools to manage their oil exposure, and we are pleased to be launching these new ETNs to continue to service our clients,” said Nick Cherney, a Janus senior vice president and head of exchange products, in a statement.

The original triple-leveraged oil notes gained prominence last year as a way to play fluctuations in the oil market. The highly volatile UWTI saw huge swings between gains and losses, and was seen by many millennial day traders as a bold short-term gamble.

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Also read:This volatile oil play popular with millennials is going out with a bang

The UWTI closed up almost 6% on Thursday, but is down 38% year to date. The DWTI fell 5.5% on Thursday, and is down 75% for the year.

The UWTI ranked fifth in TD Ameritrade’s top 10 list of shares most traded by millennials in 2015, although it wasn’t among the top 10 most traded by older investors.

Citigroup isn’t the only firm getting in on the action: ProShare Advisors LLC and U.S. Commodity Funds have also recently announced plans to launch similar triple-leveraged oil ETFs.


View more information: https://www.marketwatch.com/story/velocityshares-risky-triple-leveraged-oil-notes-find-new-life-2016-12-08

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