$2x Bitcoin Strategy ETF (BITX.US)$ Price arbitrage exists ...
$2x Bitcoin Strategy ETF(BITX.US$ Price arbitrage exists between this leveraged ETF and BTC Bitcoin. I picked up on it last week. I've now traded it several times. what's happening is throughout the day the net asset value of this leverage ETF goes from trading at a premium to a discount depending upon the supply demand depending upon how many buyers or sellers there are of this exchange traded fund.. at the end of the day and in the morning they are rebalancing. that's what is taking place. what does that mean it means that they're bringing it back to parity relative to bitcoin itself. so Bitcoin could be up 2% at the end of the day this exchange traded fund is repriced up several percent because people sold it throughout the day and depress the value relative to bitcoin.. this morning we have Bitcoin trading higher .92 pct as of this message and this ETF is down 3.77 percent. what you'll see as long as Bitcoin remains in the green this exchange traded fund will come back into parity throughout the morning and then based off of the supply demand based off of buyers and sellers of just this ETF it will move ahead. Bitcoin were to close up 92% at the end of the day this ETF will be priced higher by 3.77% at the end of the day after the close and then you'll be immediately able to go in and sell your position and profit from the repricing. if you plot the two side by side you can arbitrage this ETF relative to bitcoin itself. this will work until it doesn't that's the only way I can describe it but for right now it's working I just bought and you can't have an ETF that's a bull leveraged ETF be negative when the underlying asset is positive it's just that simple people.
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AndyH : I wish I as smart enough to understand what you are saying… it's sounds complex yet very impressive!!
10baggerbammOP AndyH: the underlying asset of this leveraged ETF is Bitcoin it trades at a 200% velocity movement higher or lower relative to bitcoin. what moves any security are buyers and sellers so if this leveraged ETF has more sellers in it because of margin calls because of profit taking because somebody thinks there's a better opportunity elsewhere in the investing universe whatever the reason then they sell this ETF it puts pressure on this ETF relative to bitcoin it will trade at a discount at the end of the day it's being rebalanced to bring it back to fair value that rebalancing results in an immediate price movement higher relative to where it closed. so right now you got Bitcoin trading up $1,000 yet this ETF is showing down 3%, that's impossible that means you buy this ETF right now pre-market I've already bought my position an hour ago I'm already profitable in it yet it's lagging behind the underlying asset Bitcoin and either today it will have a vertical Spike up when other people may be probably recognize this or computer algorithm picks up on it or at the end of the day it rebalances and it will be up several percent 3% 4% whatever it is it will immediately ratchet higher and be repriced in the aftermarket and then you can turn it immediately sell it and that's what I've been doing
CryptoKitty 10baggerbammOP: So buying premarket and selling after the market open? And you bought in because Bitcoin was rising, and ETF had basically not caught up. The rebalance of the ETF happens after the market is open, so there's an immediate rise of ETF if Bitcoin is up overnight. Correct?