Quick Read – BOIL (BOIL) has collapsed 99.98% over ten years while its unlevered sibling UNG fell only 89%, proving that 2x daily leverage amplifies decay far beyond directional moves. – The analyst who called NVIDIA in 2010 just named his top 10 stocks and ProShares wasn’t one…
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The promise on the ProShares Ultra Bloomberg Natural Gas (NYSEARCA:BOIL) tin is straightforward. You get 2x the daily move in natural gas futures. The reality is that BOIL has boiled 99.98% of its value over the past ten years, and anyone holding it longer than a few days has watched capital get ground down by the futures market itself.
What you are actually buying BOIL holds front-month natural gas futures and swaps tied to the Bloomberg Natural Gas Subindex, levered 2x and reset daily. Every month, expiring contracts roll into the next month’s contracts. When the next month trades higher than the front month, which is the normal state of the natural gas curve called contango, the fund sells low and buys high.