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Long Volatility Funds Finally Bounce, As Stocks Suffer The Trump Slump

Thursday, January 12, 2017 10:17
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Analyst Paul Weisbruch of Street One Financial brings investors his daily fund flows update, which today looks at a long-awaited bounce in a volatility-based fund, as well as some trader hesitancy in gold miners.

VXX Finally Perks Up

With equities re-tracing today (and once again we see the SPX failing to pierce through what seems like real resistance up at 2277-2278), the VIX is actually up 10% in morning trading. “Long Volatility” ETPs, however, are still suffering from the negative effects of contango in the futures markets, as VXX for example is only up about 3%.

We note that VXX traded at an all-time low, yet again, just yesterday. In the trailing one month period, VXX has seen some outflows, to the tune of about $56 million out, but largely it has collected new assets in the trailing one year period in spite of disappointing performance.

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) was trading at $22.20 per share on Thursday morning, up $0.76 (+3.54%). Year-to-date, VXX has declined -12.98%, versus a +0.85% rise in the benchmark S&P 500 index during the same period.

VXX currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #5 of 10 ETFs in the Volatility ETFs category.

Gold Miner Downside Bets Seen

In other activity, we have seen some hesitation in the Gold Miners amid their recent run up from mid-December lows, expressed in the options market. The March 21.50 puts in GDX traded in good size (>97,000) times this week, although we note that GDX is up >1.5% today, and flirting with its highest levels since November.

The Market Vectors Gold Miners ETF (NYSE:GDX) was trading at $22.97 per share on Thursday morning, up $0.40 (+1.77%). Year-to-date, GDX has gained 9.80%, versus a 0.86% rise in the benchmark S&P 500 index during the same period.

GDX currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #6 of 29 ETFs in the Precious Metals ETFs category.

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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