ProShares UltraShort Bloomberg Crude Oil (SCO)
ARCA ARCA Primary Summary
SCO Chart
SCO May Offer Outsized Returns, But Extreme Caution Is Urged
ProShares UltraShort Bloomberg Crude Oil ETF offers -2x daily inverse exposure to WTI crude but has lost ~99.5% of value over 10 years. SCO is unsuitable for most investors due to extreme volatility, a high expense ratio (0.95%), and poor long-term performance but may present a tactical opportunity. Geopolitical turmoil, especially the Iran-US conflict and Strait of Hormuz disruptions, keeps oil prices elevated; resolution timing remains highly uncertain.
SCO: Excellent On Its Day, But Timing Is Everything
ProShares UltraShort Bloomberg Crude Oil ETF is designed for short-term, leveraged bearish exposure to oil prices, not for long-term holding. SCO's structure causes significant time decay and tracking error over periods longer than a few days, making it unsuitable for buy-and-hold strategies. SCO is best used for tactical speculation or as a short-term hedge during periods of heightened oil price volatility, such as current Middle East tensions.
ProShares UltraShort Bloomberg Crude Oil ETF: Still Not For Investors
ProShares UltraShort Bloomberg Crude Oil ETF (SCO) is rated a strong sell due to high risk and poor long-term prospects for most investors. Leveraged ETFs like SCO require precise market timing to make money. Small errors can result in substantial losses, especially during volatile events like the Iran crisis.
ProShares UltraShort Bloomberg Crude Oil Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TL Tim Leary Flow Traders U.S. LLC | 199,335 | $6.98M | $3.19M | -$3.79M | -54.26% |
| CPS Chow Pak Sun Gordian Capital Singapore Pte Ltd. | 25 | $875.5 | $400.62 | -$474.88 | -54.24% |
 Taro Kuriyama Axq Capita LLP | 28,506 | $998,280 | $461,084.55 | -$537,195.45 | -53.81% |
 Christopher C. Powers Farther Finance Advisors, LLC | 289 | $7,087.24 | $4,628.33 | -$2,458.91 | -34.69% |
 Kevin Bresler TD Waterhouse Canada Inc. | 700 | $24,850 | $11,277 | -$13,573 | -54.62% |
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ProShares UltraShort Bloomberg Crude Oil Profile
| ARCA Exchange | US Country |
Overview
The fund is primarily focused on investing in a range of financial instruments that are based on WTI (West Texas Intermediate) sweet, light crude oil. Its investment objective is to leverage these financial instruments to achieve its goals without investing directly in physical oil. This approach allows the fund to potentially benefit from oil price movements while mitigating the risks and challenges associated with holding and storing physical commodities.
Products and Services
- Swap Agreements
Swap agreements are a key financial instrument for the fund, allowing it to exchange cash flows or other financial assets with another party based on the performance of WTI sweet, light crude oil. This can provide the fund with flexibility in managing exposure to oil prices without owning the physical commodity.
- Futures Contracts
Futures contracts are agreements to buy or sell a specific quantity of a commodity, such as WTI sweet, light crude oil, at a predetermined price on a specified date in the future. By investing in futures contracts, the fund aims to profit from changes in oil prices, which can be crucial for achieving its investment objectives.
- Forward Contracts
Similar to futures contracts, forward contracts involve an agreement to buy or sell a commodity at a future date, but they are privately negotiated and more customizable. The fund uses forward contracts to gain exposure to oil prices, offering potential for profit based on future price movements of WTI light, sweet crude oil.
- Option Contracts
Option contracts give the fund the right, but not the obligation, to buy (call options) or sell (put options) a specified amount of WTI sweet, light crude oil at a set price before a certain date. This can provide strategic opportunities to hedge against oil price volatility or to speculate on oil price movements.
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