Posted by califman4u on 26th of Dec 2008 at 10:38 am
DXO is at about 1/15 of its high wheras spot oil is at about
1/5. Does anyone know why that is? Actually, shouldn't
the proportion remain the same regardless, even if it is 2x?
Posted by jcomptonod on 26th of Dec 2008 at 10:48 am
The calculation for DXO isn't a straight 2x. If you look
at the prospectus- it shows a calculation for DXO that incorporates
a T-bill price (or another treasury security) into the
equation (sorry can't remember it exactly). In addition, you
have to think that since there are individuals trading the
individual security(DXO) that it may become skewed from the exact
performance of oil. just a thought.
Posted by califman4u on 26th of Dec 2008 at 11:04 am
Jcomp, thanks for the response. I don't really think it is
tied to oil at 2x as most would think. If so, it would be at
about 6 since its high was about 30 when spot oil was at
147. If oil went back up 5x from here it should conceivably
go up 10x, which would only bring it back up to 18, not 30.
At the current prices, it would seem to be moving 3x or so to spot
oil.
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DXO
Posted by califman4u on 26th of Dec 2008 at 10:38 am
DXO is at about 1/15 of its high wheras spot oil is at about 1/5. Does anyone know why that is? Actually, shouldn't the proportion remain the same regardless, even if it is 2x?
DXO
Posted by jcomptonod on 26th of Dec 2008 at 10:48 am
The calculation for DXO isn't a straight 2x. If you look at the prospectus- it shows a calculation for DXO that incorporates a T-bill price (or another treasury security) into the equation (sorry can't remember it exactly). In addition, you have to think that since there are individuals trading the individual security(DXO) that it may become skewed from the exact performance of oil. just a thought.
DXO
Posted by califman4u on 26th of Dec 2008 at 11:04 am
Jcomp, thanks for the response. I don't really think it is tied to oil at 2x as most would think. If so, it would be at about 6 since its high was about 30 when spot oil was at 147. If oil went back up 5x from here it should conceivably go up 10x, which would only bring it back up to 18, not 30. At the current prices, it would seem to be moving 3x or so to spot oil.