Oil Prices Plunge for Second Day... WTI Futures ETN Plummets

Stocks with Market Price Discrepancy Rate Surpassing a Staggering 600%

[Asia Economy Reporter Minji Lee] As international oil prices plunged for the second consecutive day, West Texas Intermediate (WTI) crude oil futures exchange-traded notes (ETNs) all sharply declined on the 22nd. Some stocks even showed a divergence rate between the underlying index value and market price exceeding 600%.

According to the Korea Exchange, the divergence rate between the real-time index value and market price of Shinhan Leverage WTI Crude Oil Futures ETN(H) soared to 605.67% as of 10:08 AM that day. The price of this stock was 720 won at the same time, down 20.44% from the previous day, but the underlying index value plummeted to 102.03 won, about one-sixth of the previous day's closing value (600.95 won). As a result, the divergence rate widened significantly. This level of divergence means that the actual value of the stock is only one-seventh of the market price, raising concerns about investor losses.

Mirae Asset Leverage Crude Oil Futures Mixed ETN(H) also plunged 29.55% at the same time but its divergence rate surged to 149.12%. The divergence rates of these stocks, which track twice the rate of change in international oil prices, jumped into triple digits due to the international oil price crashing for two consecutive days. Earlier, on the 20th (local time), May delivery WTI on the New York Mercantile Exchange (NYMEX) closed at -$37.63 per barrel, marking the first-ever negative price. On the 21st, the June contract, which replaced the expiring May contract, closed at $11.57 per barrel, down 43.4% ($8.86) from the previous day.

At the same time in the stock market, Daishin WTI Crude Oil Futures ETN(H) traded at 2,310 won, hitting the daily price limit down (-29.89%) compared to the previous day. KODEX WTI Crude Oil Futures (H) exchange-traded fund (ETF) (-29.97%) also hit the lower limit, while Mirae Asset Crude Oil Futures Mixed ETN(H) (-29.74%) and Shinhan WTI Crude Oil Futures ETN(H) (-22.66%) also plunged sharply.