(c) distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid—generally, taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and net tax-exempt interest income, for such year.
Homero Josh Garza, who founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC's complaint stated that Garza, through his companies, had fraudulently sold "investment contracts representing shares in the profits they claimed would be generated" from mining.
• Credit Risk — The Fund could lose money if the issuer or guarantor of a fixed-income instrument or a counterparty to a derivatives transaction or other transaction is, or is perceived to be, unable or unwilling to pay interest, repay principal on time, or defaults. The value of an investment in the Fund may change quickly and without warning as a result of issuer defaults or actual or perceived changes in the credit ratings of the Fund’s portfolio investments or to an issuer’s financial strength.
U.S.-listed bitcoin futures contracts may aid institutional investor participation and enable hedging while also potentially helping digital assets develop into an asset class of their own. Currently digital assets trade on platforms that lack proper execution mechanisms, governance, and standard financial industry practices. Futures contracts push trading volume towards regulated exchanges with proper governance, controls and state of the art execution mechanisms. Futures contracts also remove the arduous requirement for investors to custody “physical” bitcoin, which is a major obstacle. In some ways, bitcoin futures are an early attempt to integrate digital assets into the mainframe financial system. With such integration, regulators might also gain a greater understanding of and steadier grasp on digital assets. This may enable the creation of more explicit guidance and regulation around the space. While it is early innings for digital assets, U.S.-listed bitcoin futures may pave the way for a potentially safer, more reliable, and better governed digital asset space and regulated investment vehicles.
The investment restrictions of the Funds specifically identified as fundamental policies may not be changed without the affirmative vote of at least a majority of the outstanding voting securities of that Fund, as defined in the 1940 Act. The investment objectives and all other investment policies of the Funds not specified as fundamental (including the index of a Fund) may be changed by the Board without the approval of shareholders.
You might buy in to your Ethereum position at $1000, you set your sell position $1300. Your sell order could take days, weeks, months, years or till the end of time to be filled. Once it has been filled, you then take that profit and you roll it over in to a new buy over at, say, $1100. Choosing good targets for your buy and sell orders is crucial if you want to be a successful swing trader but overall swing trading cryptocurrency is pretty easy – set your orders and then just wait.
I’m a nomad from The States, currently residing in Indonesia. Can you suggest the best global service for wallets/exchanges? In The States it’s Coinbase but its supported countries are extremely limited for my needs limited. I need something I can access in basically any country without issue. I know there are a options out there, but I wanted to get you opinion of how other travelers have gotten past this.
If I held the opinion that an asset was going to go one way, but then made the research and it turned out that I started thinking it might actually be headed the other way, I should feel no obligation to hold on to my original opinion, just because I didnt want to feel I’ve been initially wrong. This seems obvious but is much tougher in practice for inexperienced investors.
In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income and its earnings and profits, a RIC generally may elect to treat part or all of late-year ordinary loss (generally, its net ordinary loss attributable to the portion of the taxable year after December 31) as if incurred in the succeeding taxable year.
Louis M. Mayberg, President of ProShare Advisors from inception to April 2012 and ProFund Advisors LLC from April 1997 to April 2012. Mr. Mayberg co-founded National Capital Companies, L.L.C., an investment bank specializing in financial services companies mergers and acquisitions and equity underwritings in 1986, and managed its financial services hedge fund. He holds a Bachelor of Business Administration degree with a major in Finance from The George Washington University.
If the tip is valid, it would make Morgan Stanley the latest in legacy financial groups looking to open a doorway for institutional investors to enter the cryptocurrency market. Despite false reports claiming that Goldman Sachs had put hopes for a bitcoin strategy behind it, the bank has a strategy desk in the works, a service that, if opened, would add to the bitcoin futures options it facilitates for its clients.
The question is: Do we live in a society, or do we just have a list of prices and you decide which ones to pay? Do we all try to get along together and share the world, giving due consideration to each other's needs, or do rich people just get to do whatever they want? Much of the article is devoted to the cool things that the Flatiron Institute is doing, but much of it is devoted to people fretting that there might be a downside to rich individuals determining the direction of basic science and using their money to crowd out traditional universities. Meanwhile Simons sits back and smokes and tosses pennies into the no-smoking jar.
Litecoin (LTC) is similar to Bitcoin in many of its characteristics and is also one of the more veteran cryptocurrencies out there. However, there are two main differences between Litecoin and Bitcoin: Speed and amount. While it takes 10 minutes to create a Bitcoin block, Litecoin demands roughly 2.5 minutes to create a block – meaning 4 times the speed. Moreover, Litecoin attracts many users, as it can produce 4 times the quantity of Bitcoin! However, as Litecoin uses highly complex cryptography, often mining it is more complicated than other cryptocurrencies.
• Early Close/Late Close/Trading Halt Risk — An exchange or market may close early, close late or issue trading halts on specific securities, or the ability to trade certain securities or financial instruments may be restricted, which may disrupt the Fund’s creation and redemption process, potentially affect the price at which the Fund’s shares trade in the secondary market, and/or result in the Fund being unable to trade certain securities or financial instruments. In these circumstances, the Fund may be unable to rebalance its portfolio, may be unable to accurately price its investments and/or may incur substantial trading losses. If trading in the Fund’s shares halt, shareholders may be temporarily unable to trade shares of the Fund at an advantageous time or price.
Each Fund, except for the S&P 500 Dividend Aristocrats ETF, the S&P MidCap 400 Dividend Aristocrats ETF, the Russell 2000 Dividend Growers ETF, the MSCI EAFE Dividend Growers ETF, the MSCI Europe Dividend Growers ETF, the MSCI Emerging Markets Dividend Growers ETF, the DJ Brookfield Global Infrastructure ETF, the Equities for Rising Rates ETF, the S&P 500 Ex-Energy ETF, the S&P 500 Ex-Financials ETF, the S&P 500 Ex-Health Care ETF, the S&P 500 Ex-Technology ETF, the High Yield—Interest Rate Hedged, the Investment Grade—Interest Rate Hedged and the Short Term USD Emerging Markets Bond ETF, is a “non-diversified” series of the Trust. A Fund’s classification as a “non-diversified” investment company means that the proportion of the Fund’s assets that may be invested in the securities of a single issuer is not limited by the 1940 Act. Notwithstanding each Fund’s status as a “non-diversified” investment company under the 1940 Act, each Fund intends to qualify as a RIC accorded special tax treatment under the Code, which imposes its own diversification requirements on these Funds that are less restrictive than the requirements applicable to the “diversified” investment companies under the 1940 Act. A Fund’s ability to pursue its investment strategy may be limited by that Fund’s intention to qualify as a RIC and its strategy may bear adversely on its ability to so qualify. For more details, see “Taxation” below. With respect to a “non-diversified” Fund, a relatively high percentage of such a Fund’s assets may be invested in the securities of a limited number of issuers, primarily within the same economic sector. That Fund’s portfolio securities, therefore, may be more susceptible to any single economic, political, or regulatory occurrence than the portfolio securities of a more diversified investment company.
Unsponsored ADR programs are organized independently and without the cooperation of the issuer of the underlying securities. As a result, available information concerning the issuers may not be as current for unsponsored ADRs, and the price of unsponsored depositary receipts may be more volatile than if such instruments were sponsored by the issuer and/or there may be no correlation between available information and the market value.
A futures curve shows the forward expectation of an asset’s price. Future rates of an asset can be calculated by extrapolating price from the risk-free theoretical spot rate of the asset. For example, one might calculate the possible future rate of an asset for the short (<1 month), medium (1-3 months) and long term (>3 months). In other words, future curves represent the demand for a specific asset and therefore the expected price evolution for the asset projected into the future. The curve is constructed from a discrete set of data points for various maturities. Initially, futures curves were used for hedging purposes, but with the evolution of the investment management industry, futures curves have become basic investment instruments not only for traditional commodities but also for new emerging asset classes.
• Tax Risk — In order to qualify for the special tax treatment accorded a regulated investment company (“RIC”) and its shareholders, the Fund must derive at least 90% of its gross income for each taxable year from “qualifying income,” meet certain asset diversification tests at the end of each taxable quarter, and meet annual distribution requirements. The Fund’s pursuit of its investment strategies will potentially be limited by the Fund’s intention to qualify for such treatment and could adversely affect the Fund’s ability to so qualify. The Fund can make certain investments, the treatment of which for these purposes is unclear. If, in any year, the Fund were to fail to qualify for the special tax treatment accorded a RIC and its shareholders, and were ineligible to or were not to cure such failure, the Fund would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level. The resulting taxes could substantially reduce the Fund’s net assets and the amount of income available for distribution. In addition, in order to requalify for taxation as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions.
Distributions of Shares shall be made to DTC or its nominee, Cede & Co., as the registered holder of all Shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in Shares as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial owners of Shares held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street name,” and will be the responsibility of such DTC Participants. The Trust has no responsibility or liability for any aspects of the records relating to or notices to Beneficial owners, or payments made on account of beneficial ownership interests in such Shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial owners owning through such DTC Participants.
The Funds may invest in bitcoin-based futures contracts, swap agreements, and options contracts, which are types of derivative contracts. A derivative refers to any financial instrument whose value is derived, at least in part, from the price of an underlying security, commodity, asset, rate, or index. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Changes in the value of a derivative may not correlate perfectly with the underlying security, asset, rate or index. Gains or losses in a derivative may be magnified and may be much greater than the derivative’s original cost. Because bitcoin-based derivatives were only recently introduced, the degree to which bitcoin-based derivatives are likely to provide exposure to movements in the price of bitcoin is extremely uncertain. If market participants executing trades in bitcoin-based derivatives face constraints, including capital constraints, security risks, or high execution costs with respect to direct investments in bitcoin, the price at which bitcoin-based derivatives trade may fail to capture price movements in the underlying price of bitcoin. Moreover, it is not clear how changes to the Bitcoin Network and determinations by any relevant derivatives exchange with respect to such changes to the Bitcoin Network will affect the value of any positions in bitcoin-based derivatives. [[In December 2015, the SEC proposed a new rule to regulate the use of derivatives by registered investment companies, such as the Fund. Whether and when this proposed rule will be adopted and its potential effects on the Fund are unclear as of the date of this Prospectus.]]
The Funds may invest in both sponsored and unsponsored depositary receipts. Certain depositary receipts, typically those designated as “unsponsored,” require the holders thereof to bear most of the costs of such facilities, while issuers of “sponsored” facilities normally pay more of the costs thereof. The depository of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited securities or to pass through the voting rights to facility holders with respect to the deposited securities, whereas the depository of a sponsored facility typically distributes shareholder communications and passes through the voting rights.
Institutional markets for restricted securities have developed as a result of the promulgation of Rule 144A under the 1933 Act, which provides a safe harbor from 1933 Act registration requirements for qualifying sales to institutional investors. When Rule 144A securities present an attractive investment opportunity and otherwise meet selection criteria, a Fund may make such investments. Whether or not such securities are illiquid depends on the market that exists for the particular security. The staff of the SEC has taken the position that the liquidity of Rule 144A restricted securities is a question of fact for a board of trustees to determine, such determination to be based on a consideration of the readily-available trading markets and the review of any contractual restrictions.
This post-effective amendment relates only to ProShares Bitcoin Futures Strategy ETF, ProShares Short Bitcoin Futures Strategy ETF, ProShares Bitcoin Futures/Equity Strategy ETF and ProShares Bitcoin/Blockchain Strategy ETF, each a new series of ProShares Trust. No information relating to any other series or class of series of ProShares Trust is amended or superseded hereby.
The Registrant (also, the “Trust”) is organized as a Delaware business trust is operated pursuant to an Amended and Restated Declaration of Trust, dated December 13, 2010 (the “Declaration of Trust”), that permits the Registrant to indemnify every person who is, or has been, a Trustee, officer, employee or agent of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (hereinafter referred to as a “Covered Person”), shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement thereof. This indemnification is subject to the following conditions:
The Board has approved a Distribution and Service Plan under which each Fund may pay financial intermediaries such as broker-dealers and investment advisers (“Authorized Firms”) up to 0.25%, on an annualized basis, of average daily net assets of the Fund as reimbursement or compensation for distribution-related activities with respect to the Shares of the Fund and shareholder services. Under the Distribution and Service Plan, the Trust or the Distributor may enter into agreements (“Distribution and Service Agreements”) with Authorized Firms that purchase Shares on behalf of their clients.
This may sound like an unfair system to those who are used to trading with confidence that their profits are settled in full, but it's a compromise that has been made in order to offer the high leverage. If you want to guarantee that your profits are not reduced by any socialised loss, then use CryptoFacilities or Coinpit. They use a "termination" procedure in the event of a margin call not being filled. This simply terminates the contract and sends the portfolio value of the losing counterparty to the winning counterparty. It's worth noting that the system has been incredibly robust, with very minimal socialised losses being triggered on OKCoin and none on BitMEX as of November 2015.
The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
• Futures Position Limit Risk — Limits on the amount of futures any one entity can hold may negatively impact the Fund’s ability to meet its investment objective if such limits are reached and exceptions to such limits are not granted. Currently the position limits for bitcoin futures contracts are much lower than they are for most other futures contracts.
In the normal course of business, a Fund enters into standardized contracts created by the International Swaps and Derivatives Association, Inc. (“ISDA agreements”) with certain counterparties for derivative transactions. These agreements contain, among other conditions, events of default and termination events, and various covenants and representations. Certain of the Fund’s ISDA agreements contain provisions that require the Fund to maintain a pre-determined level of net assets, and/or provide limits regarding the decline of the Fund’s NAV over specific periods of time, which may or may not be exclusive of redemptions. If the Fund were to trigger such provisions and have open derivative positions, at that time counterparties to the ISDA agreements could elect to terminate such ISDA agreements and request immediate payment in an amount equal to the net liability positions, if any, under the relevant ISDA agreement. Pursuant to the terms of its ISDA agreements, the Fund will have already collateralized its liability under such agreements, in some cases only in excess of certain threshold amounts. With uncleared swaps, a Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of default or bankruptcy of a swap agreement counterparty. If such default occurs, the Fund will have contractual remedies pursuant to the swap agreements, but such remedies may be subject to bankruptcy and insolvency laws that could affect the Fund’s rights as a creditor. Thus, a Fund will typically only enter into uncleared swap agreements with major, global financial institutions that meet the Fund’s standard of creditworthiness. The Funds seek to mitigate risks by generally requiring that the counterparties for each Fund agree to post collateral for the benefit of the Fund, marked to market daily, in an amount approximately equal to what the counterparty owes the Fund subject to certain minimum thresholds, although the Funds may not always be successful. To the extent any such collateral is insufficient or there are delays in accessing the collateral, the Funds will be exposed to the risks described above, including possible delays in recovering amounts as a result of bankruptcy proceedings.
Exchanges simply take a fee to facilitate the orderbook where its clients (the counterparties) create and trade futures contract with each other. They also have to manage the system's risk so that traders don't get overleveraged or manipulate the market. Since counterparties are only putting margin down that is a % of the contract value, the exchange also has to handle liquidation procedures in case the value of the margin is exceeded by the loss on the notional market value of the contract. For instance, BitMEX offers 100x leverage, so if you want to enter a $10,000 position you need to put down $100 worth of bitcoin. If the price moves just 0.5% against your favor, BitMEX will take over your position and execute it into the market, so that the person on the other side of the contract can have someone else who pays for the profit. In the event that the liquidation doesn't get passed off to another trader, an Auto-Deleveraging/Termination can occur, or Socialize Loss in the contract builds (we will discuss these issues in more detail later).
Hey Will. Thanks for the helpful guide! I’ve just gotten into crypto and found this info extremely useful. Just a question regarding how you keep your alt coins safe. As far as I can tell, you can’t keep many of these alt coins on a Trezor hard wallet, so do you just use something like My Ether Wallet instead? Cheers mate! Here’s to a cracking 2018!!
• Daily Position Limit Risk - Many U.S. futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit has been reached in a particular contract, no trades may be made that day at a price beyond that limit or trading may be suspended for specified periods during the trading day. In addition, these exchanges have established limits on the maximum amount of futures positions that any person may hold or control on such exchanges. These limits may restrict the amount of assets the Fund is able to invest in bitcoin futures contracts or have a negative impact on the price of such contracts. In order to comply with such limits, the Fund may be required to reduce the size of its outstanding positions or not enter into new positions that would otherwise be taken for the Fund. This could potentially subject the Funds to substantial losses or periods in which the Fund does not accept additional Creation Units.
• Intellectual property rights claims may adversely affect the operation of the Bitcoin Network. Third parties may assert intellectual property rights claims relating to the operation of the Bitcoin Network. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Bitcoin Network’s long-term viability or the ability of end-users to hold and transfer bitcoin may adversely affect the price of bitcoin and adversely affect the price of the Bitcoin Futures Contracts held by the Fund.
The Guidelines are maintained and implemented by ISS and are an extensive list of common proxy voting issues with recommended voting actions based on the overall goal of achieving maximum shareholder value and protection of shareholder interests. Generally, proxies are voted in accordance with the voting recommendations contained in the Guidelines. If necessary, the Advisor will be consulted by ISS on non-routine issues. Proxy issues identified in the Guidelines include but are not limited to:
Trading directly on CME is not possible unless you are a broker yourself. This means that you have to pay a high fee – between thousands and hundreds of thousands of USD – to join CME. As an individual investor, you need to find a broker who trades on CME. You will then open an account with this broker – a margin account rather than a cash account because in options trading, there is a margin involved, as we have seen above. Because this poses a higher risk for the broker – in case you can’t settle your debts – these deals can only be done in special margin accounts and not cash accounts.