There are new exchange traded funds (ETFs) on the market that track the price of oil without investing in the actual commodity. Claymore Securities Inc. with partner MacroMarkets LLC listed two new ETFs on the American Stock Exchange. This closely linked pair is a play on opposites- one is for bullish investors and one is for bears. John Spence for MarketWatch.com reports that each hold short-term Treasuries and cash and promise to compensate each other based on changes in the settlement price of the Nymex Division light sweet crude oil futures contract.
Claymore MacroShares Oil Up Tradeable Shares (UCR) is geared to rise in value when futures prices increase. It’s tailored for a bullish investor who wants to take a long position on oil. Claymore MacroShares Oil Down Tradeable Shares (DCR) is going to make money when the price of oil is falling, or it can be used as a hedge. This new ETF structure will pave the way for other funds linked to price movements of assets for which an index exists.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.