Loading ...thanks much for that post on JNUG. As a holder, yes, I was/am concerned.
I read the article, but ended up confused regarding an outcome.
“suspends creation orders due to a shortage”? I don’t know what that means, but have trouble seeing how high demand leads to a lower price.
A couple reader comments offered some hope for a positive outcome. Hard to see PMs tanking with all that’s happening, but I sure don’t underestimate the enemy.
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buckstopshere Apr 15, 2017 2:51 PM
Anyone who thinks going from an unlimited supply of paper to a finite supply/demand model is bearish, shouldn’t be holding physical either. That said, when Direxion eventually resumes unlimited share creation, the price will snap back.
This is what happened to TVIX when they suspended share creation…
A 89% price increase vs other Vix ETF’s
That said I wouldn’t be surprised to see JNUG sell-off some early Monday, to scare as many weak hands out before the rally starts. Although share creation for JDST won’t be suspended (i.e. you could see both go up at times), I’d be very worried about being short going into next week, given a finite supply of JNUG, Gold in an uptrend with economic/war risks. Unsure how/if this will affect GDXJ or GDX (which GDXJ holds a large stake in) but my guess is that it’ll be bullish for both because a rapid price increase in JNUG will likely bring in momentum traders.
GDXJ and its holdings will skyrocket on Monday.
http://portfolios.morningstar.com/fund/holdings?t=GDXJ