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I came across something last week that looked too good to be true.
Breakwave Tanker Shipping ETF (BWET) had a chart that screamed short. It had the same setup Iâve nailed on other plays â the kind of pattern that makes you want to pull the trigger immediately.
But I didnât, because when I dug deeper, I found red flag after red flag. By the time I was done, I knew this wasnât a short opportunity â it was a minefield.
Let me walk you through what I found, because this is the kind of thing every trader needs to watch for.
The First Sign Somethingâs Off
When I pulled up BWETâs holdings, I expected to see a list of stocks or maybe some shipping companies. Instead, nothing. An ETF has to have holdings â it canât have no holdings.
That stopped me cold. I kept digging, and when I finally found what it supposedly owns, it was a bunch of obscure references â things like Suezmax and something called a synthetic lease.
When I read that, I knew this was all a scam, and Iâm not even an accountant.
It didnât get better. The deeper I went, the more it felt off. Then I checked the assets under management: $27 million. Most firms wouldnât even keep it running if thatâs all it had. For context, thatâs pocket change in the ETF world.
The sponsor company, Amplify, barely shows up on the internet. Thereâs really a lack of oversight in the ETF business â the SEC has fast-tracked ETF filings to the point where stuff like this can exist.
The Options Market Told Me Everything
Before I walked away, I still tried to give it one last chance. Breakwave tankership â all right, letâs try to construct a debit spread to the downside. If there was any way to structure a clean, risk-defined short, I wanted to see it.
But the options chain killed that idea instantly.
Zero open interest on every strike, wide bid-ask spreads, no trading activity whatsoever. The market makers have priced it so high that theyâve taken all the incentive out of it.
That defeats the whole purpose of a market. Even if the chart looked perfect, even if the setup was clean, I couldnât ignore what I was seeing. I donât like low-volume stuff, and I donât like wide spreads with no open interest â this has âno, no, noâ written all over it.
As good as that chart is for wanting to short it, sometimes you just have to say no.
The lesson here is simple: Not every setup is worth trading. When you see synthetic structures, no real holdings, illiquid options and a tiny asset base, you walk away. I donât care how good the chart looks.
Something ainât right â and Iâm not going to be the only fool that shorts this thing. The market will always give you another pitch, so make sure youâre swinging at the right ones.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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Disclaimer: We develop tools and strategies to the best of our ability, but we can’t guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. On live trades, the result is a 78% win rate from 4/05/23 through 2/20/26, with an average return per trade (winners and losers included) of 19.88%, a 6-day average hold time, and an average winner of 52.76%.
