This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Huge ETN Euthanized

Stocks in this article: DB DXO UNG

Editor's note: This article was corrected after its initial publication. Please see Corrections and Clarifications.

NEW YORK ( TheStreet) -- In the past, ETF issuers killed off their weakest funds, stragglers that could not garner enough investor interest to be viable.

Wednesday, however, was a landmark moment for the ETF industry, as Deutsche Bank (DB) euthanized the wildly popular PowerShares DB Crude Oil Double Long ETN (DXO).

This leveraged, futures-based commodity ETN has not had trouble attracting trading volume. As of Sept. 3, the three-month average daily trading volume for the fund was 12,775,600 shares. Currently, DXO has $407 million in outstanding notes that will have to be redeemed to investors on Sept 9.

As both a leveraged fund and a futures-based commodity fund, DXO has been caught in a double regulatory crossfire this summer as the Commodity Futures Trading Commission targets "speculators" in the commodities markets and Financial Industry Regulatory Authority scrutinizes leveraged ETF products.

Regulation on both fronts seems imminent , and funds like United States Natural Gas (UNG) and DXO have tried to protect their funds from restrictions.

DXO's biggest crime, however, is its popularity. CFTC regulators will likely slap position limits on future-based commodity ETFs in the near future, making it difficult for funds to grow and track their underlying value. Larger funds, like DXO and UNG, may have reached these levels already, or are close to doing so.

One of the measures that these funds are taking to stay within limits is to halt creation. Both DXO and UNG recently halted creation, along with funds like iShares S&P GSCI Commodity Indexed Trust (GSC) and iPath Natural Gas (GAZ), to stem the need for the contracts in question.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs