CBRZ delivers -2x the daily return of cannabis stocks, betting against the sector with leverage. This fund profits when pot stocks fall, making it a tactical tool for bearish traders who think the cannabis bubble has more air to lose.
How It Works
The fund uses swaps and derivatives to create -200% daily exposure to a cannabis stock index. It resets this exposure every trading day, meaning a 5% drop in cannabis stocks would generate roughly a 10% gain for CBRZ. The underlying index likely includes major U.S. cannabis companies and related businesses in the supply chain.
Key Features
- Double-short exposure to cannabis sector in a single trade
- No borrowing costs or margin requirements like traditional shorting
- Liquid intraday trading for quick tactical positions
Risks
- Daily compounding can destroy returns if held over multiple days — a 10% drop then 11% rise leaves you down 8%
- Cannabis stocks can spike 20-30% on regulatory news, causing 40-60% losses overnight
- Zero AUM suggests this product may face delisting or closure risk
Who Should Own This
Day traders betting against cannabis hype or hedging long positions for specific events like earnings or regulatory votes. This is absolutely not a buy-and-hold investment — even bearish investors should limit holdings to a few days maximum due to compounding decay.