Lesson:Decay works like this....
Pretend WTI is $50.00
Pretend when WTI is $50.00, that UWTI is $1.00
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Okay, so its the daily open. halfway through the day WTI makes a huge swing. goes up 25%! Where does that put WTI? $62.50 ($50*1.25=$62.50)
UWTI is 3X, which mean oh shit! UWTI goes up 75%!! Which puts UWTI at $1.75 ($1*1.75=$1.75)
Following so far? now here we go....
Now the day comes to the close. It had a huge swing up up 25% earlier. WTI is at $62.50, but right at close, it drops 20%!!! That puts WTI back at $50.00! ($62.50*.8=$50.00)
Well UWTI is 3X, so that means UWTI drops 60%! UWTI was at 1.75 and after dropping 60 %, becomes $0.70! ($1.75*.4=$0.70)
But wait? What happened??? WTI opened at $50, and closed at $50!!! WTI DIDN'T CHANGE PRICE!! Why did UWTI close 30 cents cheaper than open, when WTI ended the same price? It's because when you take a percentage from a bigger number, it's a larger amount...
UWTI can definitely get to 12. And it could hit 12 at 85. or 90. or 80. It just depends on the daily percent changes.
