NUGT about to take off in price ,, wait a month and its 5 times higher !!!
The firm will execute a 1-for-6 reverse split of the shares of the Direxion Daily Energy Bear 3X Shares (ERY) and a 1-for-5 reverse split of the shares of the Direxion Daily China Bear 3X Shares (YANG), Direxion Daily Emerging Markets Bear 3X Shares (EDZ), Direxion Daily Technology Bear 3X Shares (TECS) and Direxion Daily Gold Miners Bull 3X Shares (NUGT) for shareholders of record after the close of the markets on Monday, April 1, 2013.
Take it easy on trader.I also own NUGT and just because the stock has gone down a bit two days after we bought doesn't mean we need to call it a bad investment and sell it. At least we have about a month to sell it if it has a pop before the split date.You can justify this stock having a split becaus of it's low price.Not so with TZA.
First time reading Yahoo boards and, without meaning to insult, am a little aghast at what appears to be a lack of basic information one would think necessary before dabbling in 3X short funds, which should never be held for long periods, or even overnight for most folks. And to suggest an ETF mirroring an index will "pop" due to an upcoming reverse split, or that one should trade based on worries about broker split fees, likely means staying with IWM and its reverse might be a better course for the parties in question. Nevertheless, one key point about reverse splits of funds such as TZA worth noting is that, for professional traders responsible for most of its volume, the fee structure is on a per-share basis, typically ~ 1/2c per share with a $1.00 minimum. Thus, after prolonged up-market periods, a $10 stock becomes prohibitively expensive to trade, reaching levels of $20 a round trip per $20,000. Not only will a 1:4 reduce commission costs for TZA by 75% for the same dollar trade value, but given the bid/ask spread for both TNA and TZA rarely exceeds a penny (given their volumes and liquidity), this spread is a far greater % with a $10 stock than after the rev-split (and the algos rarely let you sell at the ask when reversals happen.) Thus, I wouldn't be surprised if daily professional dollar volumes post -split rise for TZA, but of course the professional's practice of closing out positions by 4:00 shouldn't impact longer holders with respect to price.