BetaPro makes ETF history

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

By John Powell | April 14, 2010 | Last updated on April 14, 2010

1 min read

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

John Powell

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

The purpose of both funds is to capitalize on the relative price changes between natural gas and crude oil. This pair trading exploits market inefficiencies by matching a long position with a short position of two different but similar securities or futures contracts and will seek to exploit any divergence (or convergence) from the historic price relationship between the two assets.

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

The Horizons BetaPro NYMEX Long Natural Gas/Short Crude Oil Spread ETF (HNO:TSX) and Horizons BetaPro NYMEX Long Crude Oil/Short Natural Gas Spread ETF (HON:TSX ) will begin trading on the Toronto Stock Exchange on April 14th.

The purpose of both funds is to capitalize on the relative price changes between natural gas and crude oil. This pair trading exploits market inefficiencies by matching a long position with a short position of two different but similar securities or futures contracts and will seek to exploit any divergence (or convergence) from the historic price relationship between the two assets.

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

The Horizons BetaPro NYMEX Long Natural Gas/Short Crude Oil Spread ETF (HNO:TSX) and Horizons BetaPro NYMEX Long Crude Oil/Short Natural Gas Spread ETF (HON:TSX ) will begin trading on the Toronto Stock Exchange on April 14th.

The purpose of both funds is to capitalize on the relative price changes between natural gas and crude oil. This pair trading exploits market inefficiencies by matching a long position with a short position of two different but similar securities or futures contracts and will seek to exploit any divergence (or convergence) from the historic price relationship between the two assets.

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

Canada’s BetaPro has launched the world’s first commodity spread exchange traded funds.

The Horizons BetaPro NYMEX Long Natural Gas/Short Crude Oil Spread ETF (HNO:TSX) and Horizons BetaPro NYMEX Long Crude Oil/Short Natural Gas Spread ETF (HON:TSX ) will begin trading on the Toronto Stock Exchange on April 14th.

The purpose of both funds is to capitalize on the relative price changes between natural gas and crude oil. This pair trading exploits market inefficiencies by matching a long position with a short position of two different but similar securities or futures contracts and will seek to exploit any divergence (or convergence) from the historic price relationship between the two assets.

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”

Canada’s BetaPro has launched the world’s first commodity spread exchange traded funds.

The Horizons BetaPro NYMEX Long Natural Gas/Short Crude Oil Spread ETF (HNO:TSX) and Horizons BetaPro NYMEX Long Crude Oil/Short Natural Gas Spread ETF (HON:TSX ) will begin trading on the Toronto Stock Exchange on April 14th.

The purpose of both funds is to capitalize on the relative price changes between natural gas and crude oil. This pair trading exploits market inefficiencies by matching a long position with a short position of two different but similar securities or futures contracts and will seek to exploit any divergence (or convergence) from the historic price relationship between the two assets.

More often than not, a pair trade will hold an equal long position and short position of two underlying assets. Opportunistic investors can make profits on both sides if the long position increases in price while the short position declines in price. The investor may also see a net gain if they were to make the right call on the short position and the long position is flat or falls less than the gains in the short position.

Crude oil versus natural gas is one of the most widely followed price relationships in the commodity marketplace. Both commodities are used in the energy generation process. When they converge or diverge in price, investors can take advantage of whatever the current spread is.

“The development of these ETFs was really about identifying an opportunity. We offer a number of ETFs that track different commodities, and have a lot of knowledge about how investment solutions are used in that sector. We were well aware of investors trying to profit from the movement of price differentials between natural gas and oil,” Howard Atkinson, president of BetaPro, told Advisor.ca.

BetaPro believes that using an ETF to offer a pair trading strategy is another example of the versatility of the ETF structure and further proof that ETFs don’t only track indexes. BetaPro’s latest initiative could create a new subset of ETFs replicating popular trading strategies.

“We have always recognized how versatile ETFs can be and take great pride in being innovators in the ETF space. We were amongst the first commodity ETF providers in the world, and were not only the first, but remain the only ETF provider in Canada to offer leveraged and inverse ETFs in Canada,” said Atkinson. “In the last 18 months, we’ve become the sole provider of actively managed ETFs in Canada, which were launched by Horizons Alpha Pro. Now we have these Spread ETFs, which are a compelling alternative to get access to a very popular trading strategy. Until now, the only way to execute this strategy required directly purchasing futures contracts which can be an expensive and time consuming process for many investors.”