[iminhell1]

So I bought 607 shares of UCO (ProShares Ultra Bloomberg Crude Oil ETF) little while back. Couple days ago they did a reverse split, 25:1. So my 607 shares turned into 24 shares. Something like per share value went form $1.80 to $16.42.


No my question is this, I bought hoping to make some money when oil comes back up,,, was hoping maybe 6 months or so,,, not worried about making top dollar, just a quick buck.
I was basing my guess off average prices over the last 5 years, ballpark of $20/share. If my 607 @$1.83 made it up there I'd be green over $10k. Nice amount for me.
But now that I'm looking more I see UCO has done this reverse split a couple other times. So is my ballpark average actually correct?

I kinda think I'm gonna end up screwed over here but I'm just wondering how bad / if I should stick it out or cut my losses and lick my wounds.

[kscarrol]

When any stock/share does a split the number of shares changes but the value, in theory doesn’t. Your 24 shares should in theory be worth the same in dollar terms as your 607 shares were. The UCO is a two times levered oil fund meaning you will earn twice the return of oil, whether that is to the upside or the downside. Given what is happening in oil markets the returns have been awful. Often times exchanges have a minimum share price that must be maintained or the shares can be de-listed so that may be reason for the reverse split.

Whether you should cut and run really depends. Where did you buy?

Edit: if I’m reading this right you bought 607 shares at $1.83 which is a little over $1,000 invested and you now own 24 shares @ $16.42 or $342 so you are down quite a bit which is not surprising given the 2x leverage and the fall in oil prices. Your 5 year average math implies oil returning to the $50 range which is a tough uphill climb. Given the small dollar I might let it ride but that’s me.

[Archie Bunker]

Trading commodities is not like trading equities. ETFs like UCO are meant for short term hedges, not buy and hold. The most recent reverse split is only the beginning of a series of events down the road to being delisted. Sell.

[Rmtt]

Oil is way too volatile unless you are in front of a screen all day, and then you need timing.

I had friends that hit OAS on Wednesday-Thursday and made some crazy gains, but it was penny stock and they were in and out. But these guys get in and out maybe making 30%-300% on numerous stocks each day.

If looking for "Covid Stocks", typically REIT's are a good buy as they are so undervalued. But once/if travel resumes, they will go back up.

[Rmtt]

Originally Posted by kscarrol

When any stock/share does a split the number of shares changes but the value, in theory doesn’t. Your 24 shares should in theory be worth the same in dollar terms as your 607 shares were. The UCO is a two times levered oil fund meaning you will earn twice the return of oil, whether that is to the upside or the downside. Given what is happening in oil markets the returns have been awful. Often times exchanges have a minimum share price that must be maintained or the shares can be de-listed so that may be reason for the reverse split.

Whether you should cut and run really depends. Where did you buy?

Edit: if I’m reading this right you bought 607 shares at $1.83 which is a little over $1,000 invested and you now own 24 shares @ $16.42 or $342 so you are down quite a bit which is not surprising given the 2x leverage and the fall in oil prices. Your 5 year average math implies oil returning to the $50 range which is a tough uphill climb. Given the small dollar I might let it ride but that’s me.

I may be wrong, but haven't they changed the "delisted terms" because of the circumstances?

[kscarrol]

Originally Posted by Rmtt

I may be wrong, but haven't they changed the "delisted terms" because of the circumstances?

Yes but not removed...

[gatorfast]

These 2x or 3x leveraged ETFs are meant to be day traded only and not held long term as the value decays over time, more so in a volatile market. I would strongly suggest getting out and moving to a simple oil etf or just buy xom, Shell, etc as an oil play.

[iminhell1]

Well,
All of you are wrong.

As of right now, $23.94/share.
So for myself, I'm at a $194 loss right now. Vs the little over $500 loss I was at when I posted this.
So holding on was the correct move so far.

[Rmtt]

Originally Posted by iminhell1

Well,
All of you are wrong.

As of right now, $23.94/share.
So for myself, I'm at a $194 loss right now. Vs the little over $500 loss I was at when I posted this.
So holding on was the correct move so far.

Good for you! I have been through a few R/S. Some have been good....most bad.

Never been through one involving oil though.

Never a loss until you sell.

[kscarrol]

Originally Posted by kscarrol

When any stock/share does a split the number of shares changes but the value, in theory doesn’t. Your 24 shares should in theory be worth the same in dollar terms as your 607 shares were. The UCO is a two times levered oil fund meaning you will earn twice the return of oil, whether that is to the upside or the downside. Given what is happening in oil markets the returns have been awful. Often times exchanges have a minimum share price that must be maintained or the shares can be de-listed so that may be reason for the reverse split.

Whether you should cut and run really depends. Where did you buy?

Edit: if I’m reading this right you bought 607 shares at $1.83 which is a little over $1,000 invested and you now own 24 shares @ $16.42 or $342 so you are down quite a bit which is not surprising given the 2x leverage and the fall in oil prices. Your 5 year average math implies oil returning to the $50 range which is a tough uphill climb. Given the small dollar I might let it ride but that’s me.

Not all of us were wrong...