Tik-Tok trades explained — How an investor missed a 2.7 million trade
Oh no, buddy…
On this occasion, I bring you the sad story of Ryan. Apparently, Ryan was thinking of investing USD 20,000 into $GUSH on March 18th, 2020.
What is $GUSH?
$GUSH is an ETF (not a stock) that provides 2 times the return (daily) of some index with oil & gas exploration companies. It provides a vehicle to speculate on, well, the price of Oil & Gas.
So far, so good…
But there’s a caveat; GUSH did a reverse split on March 24th, 2020, 1:40, which means that for every 40 GUSH shares, you would automatically be left with just 1.
So let's say that Ryan bought only 40 shares and paid for them, 39 cents each. A total investment of USD 15.6.
After the split, and because splits don’t affect the valuation. Ryan would only have 1 share with the new price of USD 15.6
As always, here’s a chart.
So no, I’m afraid, Ryan, that while not a bad trade at all, you still wouldn’t be a millionaire.
Which I guess is good news for Ryan?
