Thursday, December 8

The big news of the day is that UWTI and DWTI are to be delisted in what will be the largest delisting of an ETF or ETN in market history. At the time of the announcement UWTI held $1.57 billion in assets (81,697,583 notes at $19.22) and DWTI held $227 million (2,990,404 at $75.83).

Typically this process follows the same procedure – the backer closes the fund, delists it, liquidates assets, and returns the proceeds to remaining shareholders all within a few trading days. The issuer in this case, Credit Suisse has decided to do things in a much less shareholder-friendly way. The notes will be delisted, but they WILL NOT be liquidated or automatically redeemed. Once they are delisted (in 10 minutes) any remaining shareholders will still be able to initiate a redemption as usual – but only with exact multiples of 25,000 units.

That said UWTI is trading up 5.51 % today, but there is no predicting what will happen as close of market approaches. Attempting to trade this asset in the OTC market will be difficult if not impossible for small investors, and I sincerely hope no non-institutional investors hold these assets at the end of the day.

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In regular news our holdings in CHK appreciated somewhat today (up 0.53% at time of writing) but we are waiting in anticipation of much colder conditions by the middle of next week. Since the conditions are almost certain in our opinion and EIA has announced continued storage drops for next week we have taken a position in UGAZ which we plan to hold into tomorrow morning. We are now confident enough to accept the higher risk investment in order to increase profit from this weather event.

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