Lists of Leveraged and Inverse Oil and Gas ETFs and ETNs
Exchanged-traded funds (ETFs) and exchange-traded notes (ETNs) related to oil and natural gas are among the most popular types of commodity exchange-traded products (ETPs). Commodity ETPs enable you to hold positions (go long) in commodities—in this case, oil and/or natural gas—by buying a single product that's easily traded on an exchange; these ETPs typically aim to mimic the return of an index of commodities futures contracts, before management fees and other expenses. (Futures are derivatives—financial instruments that derive their value from another instrument or instruments. Futures contracts are agreements to buy or sell a particular asset at a set price on an agreed-upon date.)
Other ETPs let you buy a basket of stocks of companies in the oil and/or natural gas business by buying a single product; they seek to match the return of a petroleum industry stock index, before expenses.
Leveraged Oil and Natural Gas ETFs and ETNs
Some ETPs are leveraged, which means they attempt to return, on a daily basis, a multiple of the return of their benchmark. For example, the Direxion Daily S&P Oil & Gas Exploration & Production Bull 3X Shares ETF seeks to return 300% of the performance of the S&P Oil & Gas Exploration & Production Select Industry Index each day.
Leveraged ETPs can provide outsized returns, but they also involve outsized risk. It's possible to quickly lose the entire value of your investment.
Inverse Oil and Natural Gas ETFs and ETNs
Inverse oil and/or natural gas ETFs and ETNs are ways to create short positions in those petroleum commodities by buying a single product that's traded on an exchange. (A short position is generally taken when you sell borrowed amounts of a tradable entity with the intention of buying them back for a lower price. It's a way of betting on a drop in a market.)
Inverse ETFs typically use various types of futures contracts to mimic the opposite performance of their underlying benchmark. Their share prices generally correlate to the net asset value of their holdings.
Inverse ETNs are unsecured debt securities that aim to provide the opposite performance of their underlying benchmark. At maturity, they will pay the opposite of the return of the benchmark they track. You can also make money from them—and from inverse ETFs—by selling them at a higher price than the one you bought them at. Inverse ETNs' market prices are determined in part by the performance of the underlying index and are also affected by the perceived creditworthiness of their issuer.
You can use these inverse ETPs to inversely track an underlying index or other grouping of investments, if you believe its value will fall, or to hedge against downside risk in similar investments you own (in a long position).
Short-Term Investments With Higher Expenses
The values of leveraged and inverse ETFs and ETNs are typically recalculated every day along with the financial instruments that make them up. Because of the complicated rebalancing involved, these inverse ETPs may not be able to accurately reflect the intended opposite performance of their benchmark beyond that particular day. And as a result, they are generally not recommended as long-term investments. (As of January 22, 2019, The Vanguard Group Inc., the second-largest provider of ETFs in the world, was no longer accepting new investments in leveraged or inverse ETFs, ETNs, or mutual funds.)
In addition, because of the frequent buying and selling of their underlying derivatives, inverse ETPs usually have higher expense ratios than those of other ETPs.
You should conduct thorough research before you commit money to oil and gas ETPs or any other investment.
These lists aren't intended to be comprehensive, but they cover most of the world of these kinds of ETPs. Click on the link on the ticker symbol for more information.
Leveraged Oil and Natural Gas ETPs
- BOIL — ProShares Ultra Bloomberg Natural Gas ETF
- DIG — ProShares Ultra Oil & Gas ETF
- ERX — Direxion Daily Energy Bull 3X Shares ETF
- GASL — Direxion Daily Natural Gas Related Bull 3X Shares ETF
- GUSH — Direxion Daily S&P Oil & Gas Exploration & Production Bull 3X Shares ETF
- NRGO — MicroSectors U.S. Big Oil Index 3X Leveraged ETN
- NRGU — MicroSectors U.S. Big Oil Index 2X Leveraged ETN
- OILU — ProShares UltraPro 3x Crude Oil ETF
- UCO — ProShares Ultra Bloomberg Crude Oil ETF
- UGAZ — VelocityShares 3x Long Natural Gas ETN
- UWT — VelocityShares 3x Long Crude Oil ETN
Inverse Oil and Natural Gas ETPs
Those marked with an asterisk are also leveraged.
- DDG - ProShares Short Oil & Gas ETF
- DGAZ — VelocityShares 3x Inverse Natural Gas ETN*
- DRIP — Direxion Daily S&P Oil & Gas Exploration & Production Bear 3X Shares ETF*
- DUG - ProShares UltraShort Oil & Gas ETF*
- DWT — VelocityShares 3x Inverse Crude Oil ETN*
- ERY — Direxion Daily Energy Bear 3X Shares ETF*
- GASX — Direxion Daily Natural Gas Related Bear 3X Shares ETF*
- KOLD — ProShares UltraShort Bloomberg Natural Gas ETF*
- NRGD — MicroSectors U.S. Big Oil Index –3X Inverse Leveraged ETN*
- NRGZ — MicroSectors U.S. Big Oil Index –2X Inverse Leveraged ETN*
- OILD — ProShares UltraPro 3x Short Crude Oil ETF*
- SCO — ProShares UltraShort Bloomberg Crude Oil ETF*
- WTID — UBS ETRACS ProShares Daily 3x Inverse Crude ETN*
- YGRN — MicroSectors U.S. Big Oil Index Inverse ETN
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.