Trade oil: investment via ETC or certificate
Investors speculating on another price rally or seasonal correction can do so with leveraged ETCs or Factor Certificates. Such leverage certificates can increase the performance of the underlying asset by a factor of two, three, four or more.
In order for the issuer of such derivative financial products to be able to reflect the price development of the underlying asset, he himself must purchase futures contracts on the commodities exchange. However, since such contracts always have a certain term, there is a risk of rollover losses. This is because the issuing bank of the ETC or factor certificate must repeatedly invest in new contracts in order to enable the investor to participate precisely in the underlying. This transfer is called “roles” in the financial industry. Due to this fact, investors should rather avoid such products, especially in long sideways trends in the underlying.
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