The headline below popped up on my Twitter feed.
The article sits behind a paywall so the first and easiest thing to do was to look up the performance of NOPE ETF. The performance can be seen below.
It’s not hard to see why they want to shut it – what is more interesting is how people who supposedly know what they were doing allowed the fund to collapse so quickly. The answer seems to lie in the following –
- Excessive leverage.
- Concentration bets.
- Poor understanding of market direction.
- No money management.
From what I have been able to glean NOPE held leveraged short positions in the following stocks –
It doesn’t really take a trading genius to spot where the problem is – if you are betting money you have borrowed on price moving in the opposite direction to which it has been moving all year it is only a matter of time before it ends in tears.