UBS AG, begun trading the ETRACS S&P GSCI Crude Oil Total Return Index ETN (NYSE Arca: OILX) on Thursday, February 18, 2016. Here is a synopsis of the new ETN:
|Exchange: NYSE Arca
|Name: ETRACS S&P GSCI Crude Oil Total Return Index ETN
|Net Expense Ratio: 0.50%
The ETRACS S&P GSCI Crude Oil Total Return Index ETN due February 22, 2046 are Series B senior unsecured debt securities issued by UBS AG that provide exposure to potential price appreciation in the S&P GSCI Crude Oil Total Return Index.
On any Trading Day on or after February 23, 2017, UBS may at its option redeem all, but not less than all, issued and outstanding Securities. To exercise its Call Right, UBS must provide notice to the holders of the Securities not less than 10 calendar days prior to the Call Settlement Date.
The S&P GSCI Crude Oil Total Return Index is a sub-index of the S&P GSCI commodity index (S&P GSCI) and measures the excess returns from the West Texas Intermediate crude oil futures contract traded on the New York Mercantile Exchange plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts.
The WTI crude oil futures contract included in the Index changes each month because the contract included in the Index at any given time is currently required to be the WTI crude oil futures contract traded on the New York Mercantile Exchange with the closest expiration date (front-month contract). The front-month contract expires each month on the third business day prior to the 25th calendar day of the month. The Index incorporates a methodology for rolling into the contract with the next closest expiration date (next-month contract) each month.
The Index gradually reduces the weighting of the front-month contract and increases the weighting of the next-month contract over a 5 business day period commencing on the fifth business day of the month, so that on the first day of the roll-over the front-month contract represents 80% and the next-month contract represents 20% of the Index, and on the fifth day of the roll-over period (i.e., the ninth business day of the month) the next-month contract represents 100% of the Index.
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