VelocityShares Credit Suisse 3X Long Crude ETN (UWTIF)

[Smittle]

In Twist, VelocityShares Unveils New Leveraged Oil ETNs

Products are nearly identical to popular ETNs that were bumped off exchange

By Asjylyn Loder and Chris Dieterich
With just minutes remaining in the last trading session for its popular triple-leveraged oil exchange-traded notes, VelocityShares launched two nearly identical products with a new bank as partner.

The two new VelocityShares 3x long and short oil ETNs will be available for trading on Friday under the tickers UWT and DWT. The original ETNs, which will be delisted after Thursday, traded under the ticker UWTI and DWTI.

Imminent delisting of the latter products, popular among day traders, prompted some brokerages to impose trading restrictions ahead of the uncertain future.

VelocityShares partners with different banks to issue its ETNs. Last month, Credit Suisse Group AG, the original issuer of the triple-levered oil ETNs, announced plans to delist both products after Dec. 8. While the products will technically remain active, they will move into the over-the-counter market, making them more difficult and costly to trade.

The new ETNs will be issued by a unit of Citigroup

“Credit Suisse is not involved in any way in the offering of UWT or DWT,” VelocityShares said in a statement released Thursday.

ETNs are similar to exchange-traded funds: they trade on exchanges like a stock, and track the price of stocks, bonds or commodities in an easily tradeable form. But there’s one big difference. ETFs own the underlying assets that they track. ETNs, on the other hand, are debt issued by a bank, similar to a corporate bond. If the issuing bank goes broke, investors can be left with pennies on the dollar, as ETN investors learned when Lehman Brothers Holdings Inc. collapsed in 2008.

“Our objective was to get these products out as soon as possible, and this was the soonest we could do it,” said Nick Cherney, head of exchange-traded products for Janus Capital Group, the owner of the VelocityShares brand.

VelocityShares may soon have competition. ProShare Advisors LLC on Dec. 5 announced its plans to launch triple-leveraged oil ETFs. And US Commodity Funds, the company behind the U.S. Oil Fund ETF, filed a preliminary prospectus to do the same on Nov. 29.

http://blogs.wsj.com/moneybeat/2016/12/08/in-twist-velocityshares-unveils-new-leveraged-oil-etns/?mod=yahoo_hs