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Downside Options Bets Return To The iShares Russell 2000 Index ETF

Wednesday, March 8, 2017 9:41
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Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out some conflicting money flows in the two largest junk bond funds, along with renewed struggles in a popular small cap ETF.

We have talked about very light outflows in the ETF market in general in at least the past week or so, and this theme continues into the middle part of this week. HYG (iShares High Yield Corporate Bond) has seen some bloodletting this week though, with about $600 million leaving the fund. This total, which is not gigantic but still worth noting, actually leads all ETPs in the short term in net redemption flows.

Year-to-date, HYG has seen more than $1.3 billion vacate the fund via redemptions, while competing ETF JNK (SPDR Barclays High Yield Bond) has actually seen net creations during this time period of over $360 million. This sort of conflict in flows is unusual and worth monitoring to see which direction prevails.

In other action, we have mentioned recently that Small Caps were previously breaking out to new all-time highs just six trading sessions ago, but IWM (Russell 2000) for example has had trouble with the $138-$140 level. The largest Small Cap fund is is tenuously hanging above its 50 day moving average today.

We have seen some March 137 put buying there this week, so it appears traders are beginning to bet on additional Small Cap downside once again.

The iShares Russell 2000 Index ETF (NYSE:IWM) was trading at $136.76 per share on Wednesday morning, down $0.04 (-0.03%). Year-to-date, IWM has gained 1.42%, versus a 6.16% rise in the benchmark S&P 500 index during the same period.

IWM currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 28 ETFs in the Small Cap Blend ETFs category.

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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