ProShares Silver ETFs Trading Away From NAV

Two ProShares silver ETFs that offer investors double exposure to the spot price of silver both ended Wednesday's and Thursday's sessions at least 20 percent away from their net asset values, according to data compiled by IndexUniverse.

The ProShares UltraShort Silver ETF (NYSEArca:ZSL), a double-exposure bearish fund, ended Thursday at a 20.35 percent premium, while the ProShares Ultra Silver ETF (NYSEArca:AGQ), a double-bullish security, ended Thursday's session at a discount of more than 27 percent. On Wednesday, ZSL was at a 19.8 percent premium and AGQ was at a 20 percent discount.

Silver is in the midst of a large correction that, at its sharpest, chopped off almost a third of the precious metal's value. The iShares Silver Trust (NYSEArca:SLV), a popular physical ETF, was trading Friday at $33.37, about unchanged on the day, but 31 percent below its peak of $48.35 reached in late April. The silver sell-off was part of a broad pullback in commodities that also pulled crude oil below $100 a barrel for the first time in weeks.

One ETF trader was quick to say that the fact that ZSL and AGQ are trading so far away from NAV is "no isolated event," given the recent volatility in silver markets.

Both ETFs are based on the U.S. dollar fixing price for spot delivery in London.

ProShares Chief Executive Officer Michael Sapir noted that it's important for investors to gauge performance of the two ETFs by looking closely at the London fix price of silver, which is set at noon London time, or 7 a.m. Eastern Time.

"If you do that, you'll see that these funds do what they are supposed to," Sapir said in a prepared statement. "For instance, from 7:00 a.m. to 4:00 p.m. (on Thursday), silver was up 5.06 percent. From their 7:00 a.m. NAV, AGQ was up 10.03 percent ZSL was down 10.25 period in that period," Sapir said.

Looking at the Wednesday to Thursday period, Sapir said:"Taking a full day as an example, from 7:00 a.m. May 11, to 7:00 a.m May 12, silver was down 17.05 percent. Based on their NAV, AGQ was down 34.09 percent and ZSL was up 34.12 percent," the ProShares executive said.

Top 10 Highest Premiums

ZSL ProShares UltraShort Silver 20.35
PEK Market Vectors China 12.14
PTD UBS E-TRACS CMCI Short Platinum Excess Return ETN 9.49
CUPM iPath Pure Beta Copper ETN 9.43
GAZ iPath Dow Jones-UBS Natural Gas Total Return ETN 5.73
FOIL iPath Pure Beta Aluminum ETN 5.42
TLL ProShares UltraShort Telecommunications 5.34
SLV iShares Silver 5.11
SIVR ETFS Physical Silver 5.00
UMX ProShares Ultra MSCI Mexico Investable Market 4.63

Bottom 10 Lowest Discounts

Ticker Name Discount
AGQ ProShares Ultra Silver -27.48
RPX Grail RP Growth -5.74
USV UBS E-TRACS CMCI Silver Total Return ETN -4.14
GMMB Grail McDonnell Intermediate Municipal Bond -4.12
ROLA iPath Long Extended Russell 1000 TR ETN -3.49
TDH TDX Independence 2020 -3.23
JPX ProShares UltraShort MSCI Pacific ex-Japan -3.17
BCM iPath Pure Beta Broad Commodity ETN -3.06
KRU ProShares Ultra KBW Regional Banking -2.59
TDD TDX Independence 2010 -2.54
May Price Action in AGQ and ZSL

Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

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Copyright ® 2011 Index Publications LLC . All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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