Back in 2008, the “original” MacroShares Oil Up and Oil Down pair were forced to close when the price of oil skyrocketed, driving the value of Claymore/MacroShares Oil Down (former ticker = DCR) to zero. The “new” MacroShares Oil Up/Down pair launched last July were supposed to avoid the problems of the original pair by basing their starting value on $100 oil.
However, MacroMarkets has another escape hatch in the prospectus. This time, the failure of the trust to attract $50 million in assets provided an option to terminate. Today, the firm announced that the last day of trading for MacroShares $100 Oil Up (UOY) and MacroShares $100 Oil Down (DOY) will be June 25, 2009. At that time, the final value of the trusts will be calculated based on the August NYMEX light sweet crude oil futures contract.
Back on January 30, both DOY and UOY underwent a ridiculous 4:1 split in a feeble attempt to boost trading. At that time, I predicted the stunt would fail and said to “Look for them in a future issue of ETF Deathwatch.” Sure enough, they were highlighted in the March edition of ETF Deathwatch and have been regulars ever since.
In February I warned investors that MacroShares do not behave like other ETFs and typically trade at significant discounts and premiums to their net asset values. DOY had zero trades on Monday and Tuesday this week and only traded 100 shares on Thursday. Additionally, these products have extremely wide bid/ask spreads. If you own either DOY or UOY, be sure to use a limit order when you try to exit your positions.