Halting share issuance also makes it more difficult to find shares to borrow and short the ETN. Traders that short securities are betting that the price will fall.
In other words, the ETNs were being influenced by factors outside the movements of the markets they’re designed to track. [Natural Gas ETN Tumbles as Premium Unwinds]
There are other exchange traded funds and notes that are trading at premiums and discounts, although most of the worst offenders are relatively small in terms of assets under management.
The following funds were trading at a discount of at least 10% as of March 26, according to Morningstar:
The following funds were trading at a premium of at least 10%:
- UBS E-TRACS Long Platinum ETN (NYSEArca: PTM)
- Columbia Intermediate Muni Bond Strategy Fund (NYSEArca: GMMB)
- iPath Dow Jones-UBS Natural Gas ETN
- iPath Short Extended Russell 1000 ETN (NYSEArca: ROSA)
It’s important to remember that premiums and discounts are fluid and can change from day to day. The data above is based on a snapshot from March 26.
