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Options Traders Are Betting These ETFs Will Get Hit Hard

Friday, November 4, 2016 10:57
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bear-marketTechnical analyst Paul Weisbruch uncovers some unusual options market activity that indicates rising bearish sentiment among a few very popular ETFs.

As we have mentioned in the past several recaps, the only appetite for SPY options lately is for downside, and now near-the-money puts going into November expiration — which of course falls after the Presidential election next week.

Most recently, November 208 puts have been in play too, and are now only slightly out-of-the-money thanks to the unabated slide in the SPX this week. Previously we have also seen trading in both the 205 and 200 strikes in SPY puts in November, which imply even further downside in the benchmark index.

Additionally, hedgers were in yesterday in EEM (iShares MSCI Emerging Markets) as well, which continues to slide today for the fourth straight trading session.


The November 35 puts traded in decent size there. Those options imply a more than 3% downside over the next few weeks.

Finally, we’ve also been watching large outflows in HYG (iShares High Yield Corporate Bond) lately, and yesterday December 84 strike put buyers also appeared in the product, looking for additional downside apparently.


HYG is actually up slightly today in afternoon trading, but the share price trend there — along with money flows — is clearly down since the last week of October.

Investors and traders are well advised to monitor these options market developments closely, as they may be indicative of further bearish action in these names.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch
paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.

Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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