March crude oil short sellers take a major hit: inverse ETFs see a record monthly inflow but fall 41%

Gate News reports that on April 1, a batch of crude oil traders heavily shorted in March, betting that oil prices—driven by the Iran war and at elevated levels—would fall back. However, so far, most traders have suffered significant losses. Data shows that in March, ETF investors poured $977 million into the ProShares UltraShort Bloomberg Crude Oil ETF (SCO, a crude oil inverse ETF that provides twice the inverse return of crude oil price movements), marking the largest single-month net inflow since the fund’s establishment in 2008. Despite this record inflow, SCO’s total assets remain only $970 million, less than the total monthly inflow. Rocky Fishman, founder of Asym 500, said, “This is a bet that ‘the war will end soon’.” After President Trump again hinted that the Iran war might be ending, the fund rose 8%, but it still declined 41% in March, marking its worst performance in nearly six years. However, short bets are only half of the market picture; long-side funds also set records. The USO (United States Oil Fund, an oil ETF) attracted about $700 million in March—its largest single-month inflow since the pandemic—while the US Brent crude oil fund (BNO, a Brent crude oil ETF) attracted $600 million, reaching a record high. The market remains highly divided, with leveraged capital hedging against both sides’ bets.