For those of you who went to bed last night when the ProShares Ultra Bloomberg Crude Oil Fund (UCO) was trading at $1.35 and woke up this morning seeing the price at nearly $34, don't get too excited.

The fund is executing a 1:25 reverse split in order to get in front of any potential regulatory issues from the share price dropping too low. It's all an accounting procedure. There are no huge gains to be had here.

In fact, UCO is about to get hammered again. At Tuesday's market open, it traded around $20, another 40% loss and top of 2020's already steep losses.

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UCO's unleveraged counterpart, the United States Oil Fund (USO), is also looking at huge losses ahead. It's not at risk of a reverse split (yet), but it could be soon headed in that direction.

While reverse splits, in a vacuum, are nothing more than an accounting adjustment, in reality, they're an indication of a fund issuer trying to save a flailing product. In this case of oil ETFs (or VIX-linked products from two years ago), the products were on the brink of collapse and the reverse split is a hail mary to keep them afloat. The VIX products were liquidated as part of an agreement written into their mandate, but the oil ETFs may be different.

These events always serve as a good reminder to investors to know what you're getting yourself into. Leveraged products are especially dangerous and can end up a total loss in just a matter of days in the wrong conditions.

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