BITO closed on 9/30/23 at 13.81 and closed on 9/30/24 at 19.01- was there something different last year that allowed BITO to close at a higher price at fiscal year end last year and will preclude that from happening this year?
That’s a great question that got me wondering for many days. I think this can be explained by 2 factors: 1st is that contracts were rolling over 2 months. So the “closing” price actually had part of unrealized profit or losses that were going to the next month. 2nd (and I think this is the main reason) is what I describe at the end of the article, the fact that shares can be created or destroyed depending on inflow/outflow. For example if there is 10 shares at $11 and $10 of profit to distribute, it would distribute $1 per share and go back to $10 per share. But if there is lot of people buying the fund, new shares are issued. and now with 20 shares at $11, the $10 of profit will become $0.5 per share to distribute, and price will drop to $10.5.
BITO closed on 9/30/23 at 13.81 and closed on 9/30/24 at 19.01- was there something different last year that allowed BITO to close at a higher price at fiscal year end last year and will preclude that from happening this year?
That’s a great question that got me wondering for many days. I think this can be explained by 2 factors: 1st is that contracts were rolling over 2 months. So the “closing” price actually had part of unrealized profit or losses that were going to the next month. 2nd (and I think this is the main reason) is what I describe at the end of the article, the fact that shares can be created or destroyed depending on inflow/outflow. For example if there is 10 shares at $11 and $10 of profit to distribute, it would distribute $1 per share and go back to $10 per share. But if there is lot of people buying the fund, new shares are issued. and now with 20 shares at $11, the $10 of profit will become $0.5 per share to distribute, and price will drop to $10.5.