Velocityshares 3X Long Natural Gas ETN (UGAZ)

[tw0122]

If DGAZ implodes like XIV did it will cause UGAZ to also implode. February VIXplosion that anihilated several inverse VIX ETNs, pointed out that DGAZ and its “long” leveraged cousin UGAZ could be liquidated if natural gas prices move sharply: "Because these products offer 3x daily leverage, a one day move greater than 33 per cent in either direction would blow up one of them," he wrote.



In other words, the market was this close to another inverse ETN extinction event, only this time not in volatility but in natural gas. Meanwhile, the DGAZ's days may be limited: starting off the month with $500MM in assets, in just two weeks it has been cut in half, and as of this morning had just $247MM in assets