

Inverse Product
1 Estimated data for reference only
Data as of 1st December 2021
What is CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product?
2 Source: Bloomberg, CSOP research
* Please note that under exceptional circumstances (e.g. increased margin requirement by the exchange or increased Initial Amount requirement by the Swap Counterparty in extreme market turbulence), the margin requirement or the Initial Amount requirement may increase substantially. Please refer to the Product’s Prospectus for details
1. Portfolio Enrichment and Diversification with Convenient and Efficient Investment
Simple and straightforward investment
Invest in WTI crude as simply as trading stocks in Asian time zones.
Low investment threshold
One board lot only costs no more than 1,000 HKD.
Portfolio diversification
WTI crude has a low correlation with other assets (e.g. equities and gold). Adding crude oil to your portfolio could spread the overall risk.
Hedge against crude oil volatility
Crude oil prices are highly volatile. In the ever-changing market environment, holding contrarian products can effectively hedge risk.
Daily (-1x) Inverse Product
(7345.HK)
2. Oil is One of the Most Volatile Assets
Given the changes brought by COVID-19, escalating geopolitical disputes and carbon neutrality goals, oil prices are now facing unprecedented uncertainties than ever before.
Trading Opportunities amid Volatility
US WTI Crude Oil Futures Price in USD per barrel

Source: Bloomberg, CSOP research
The Post-pandemic Turmoil
WTI Crude Oil Futures Price in USD per barrel

Source: Bloomberg, Reuters, CSOP research
3. Global Carbon Neutrality Goal Challenges Oil’s Dominant Energy Position
New Energy Era is Emerging
Renewables and Low-carbon in power generation

Electric vehicles are more widely used globally than before, and 2021 global electric vehicle sales are estimated to reach 6.4 million USD with a year-on-year growth rate of 98%

Source: www.ev-volumes.com, Thunder Said Energy, World’s Top Exports, CSOP research
When investing in the CSOP WTI Crude Oil Futures Daily (-1x) Inverse Product, investors should be aware of the risks below.
1. Difference between oil spot price, future prices and Solactive WTI 1-Day Rolling Futures Index
- The oil spot price is the current price of oil for immediate purchase and delivery, which is not practical for oil investment.
- Oil futures price is the cost of oil that will be delivered at a future point, which is determined on oil spot price, plus the cost of carry during the interim before delivery. As the futures price will converge with spot price at the delivery date, there might be extreme cases in which the futures price plummets into negative. As there is no physical delivery, futures contracts are also the common practices for oil investment.
- The Solactive WTI 1-Day Rolling Futures Index tracks the performance of the WTI Futures Contracts prices with certain rolling strategy and the futures rolling will be completed before delivery date. Though the futures rolling will incur a curtain amount of rolling costs, the extreme situation of future negative prices will not happen.
- WTI Futures price = WTI oil spot price + cost of carry
- Solactive WTI 1-Day Rolling Futures Index = WTI Futures price + futures roll strategy
- Solactive WTI 1-Day Rolling Futures Index can reflect the WTI oil spot price movement but is not a perfect replication of oil spot price.
2. Compounding risk
Compounding risk indicates the Product’s performance may not track inverse (-1x) Index return over a period greater than 1 Business Day.
Index daily return | Index level | Index accumulative return | Inverse product Daily return | Inverse product NAV | Inverse product accumulative return | -1x of Index accumulative return | Difference | |
---|---|---|---|---|---|---|---|---|
Day 0 | 100.00 | 100.00 | ||||||
Day 1 | 10% | 110.00 | 10% | -10% | 90.00 | -10% | -10% | 0% |
Day 2 | 10% | 121.00 | 21% | -10% | 81.00 | -19% | -21% | 2% |
Day 3 | 10% | 133.10 | 33% | -10% | 72.90 | -27% | -33% | 6% |
Day 4 | 10% | 146.41 | 46% | -10% | 65.61 | -34% | -46% | 12% |
The chart below further illustrates the difference between (i) the Product’s performance; (ii) -1x the accumulative Index return and (iii) accumulative Index return, in a continuous upward market trend over a period greater than 1 Business Day.

Index daily return | Index level | Index accumulative return | Inverse product Daily return | Inverse product NAV | Inverse product accumulative return | -1x of Index accumulative return | Difference | |
---|---|---|---|---|---|---|---|---|
Day 0 | 100.00 | 100.00 | ||||||
Day 1 | -10% | 90.00 | -10% | 10% | 110.00 | 10% | 10% | 0% |
Day 2 | -10% | 81.00 | -19% | 10% | 121.00 | 21% | 19% | 2% |
Day 3 | -10% | 72.90 | -27% | 10% | 133.10 | 33% | 27% | 6% |
Day 4 | -10% | 65.61 | -34% | 10% | 146.41 | 46% | 34% | 12% |
The chart below further illustrates the difference between (i) the Product’s performance; (ii) -1x the accumulative Index return and (iii) accumulative Index return, in a continuous downward market trend over a period greater than 1 Business Day.

Index daily return | Index level | Index accumulative return | Inverse product Daily return | Inverse product NAV | Inverse product accumulative return | -1x of Index accumulative return | Difference | |
---|---|---|---|---|---|---|---|---|
Day 0 | 100.00 | 100.00 | ||||||
Day 1 | 10% | 110.00 | 10% | -10% | 90.00 | -10% | -10% | 0% |
Day 2 | -10% | 99.00 | -1% | 10% | 99.00 | -1% | 1% | -2% |
Day 3 | 10% | 108.90 | 9% | -10% | 89.10 | -11% | -9% | -2% |
Day 4 | -15% | 92.57 | -7% | 15% | 102.47 | 2% | 7% | -5% |
The chart below further illustrates the difference between (i) the Product’s performance; (ii) -1x the accumulative Index return and (iii) accumulative Index return, in a volatile downward market trend over a period greater than 1 Business Day.

As illustrated in the graphs and the tables, the accumulative performance of the Product is not equal to inverse the accumulative performance of the Index over a period longer than 1 Business Day.
Source: CSOP research