SCO's futures-based index means that its returns reflect price appreciation on its futures contracts as well as any return from "rolling" those futures contracts. The underlying index provides exposure to three separate contracts at equal-weighting of 1/3 each.
Is SCO a leveraged ETF?
This ETF offers 2x daily short leverage to the broad based Dow Jones-UBS Crude Oil Sub-Index, making it a powerful tool for investors with a bearish short-term outlook for crude oil.
How do oil futures ETFs work?
Oil ETFs are exchange traded funds made up of oil futures contracts. When contracts in the future are priced higher, a situation called contango, the ETF ends up holding fewer contracts than it did before the roll.
What is the best oil ETF?
The oil exchange-traded funds (ETFs) with the best one-year trailing total return are DBO, BNO, and OILK. The top holdings of the first and third of these ETFs are futures contracts for West Texas IntermediateWest Texas IntermediateWest Texas Intermediate (WTI) is a light, sweet crude oil that serves as one of the main global oil benchmarks. It is sourced primarily from inland Texas and is one of the highest quality oils in the world, which is easy to refine. WTI is the underlying commodity for the NYMEX's oil futures contract.https://www.investopedia.com › terms › wtiWest Texas Intermediate (WTI) Definition - Investopedia (WTI) light sweet crude oil, and the top holding of the second are futures contracts for Brent Crude OilBrent Crude OilBrent is an Old English given name and surname. The place name can be from Celtic words meaning "holy one" (if it refers to the River Brent), or "high place", literally, "from a steep hill" (if it refers to the villages in Somerset and Devon).https://en.wikipedia.org › wiki › Brent_(name)Brent (name) - Wikipedia.