Bearish Options Bets Roll In On Utilities ETF XLU Ahead Of Month-End
Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out some apparent hedging in utilities ETFs ahead of the beginning of the new month tomorrow.
Cupid has been very good to stocks in the month of February, as the S&P 500 (SPX) has only registered three down days coming into today (with the futures off slightly this morning) in the entire month.
The SPX is up roughly 100 points from where it was the last day of January, and up more than 3% in the trailing one month period, so it would not be surprising to see some tactical model changes in the ETF marketplace beginning tomorrow on the first of March given the move.
We have seen some out-of-the-money put buying in XLU (SPDR Utilities) recently involving the March 49 strikes, and this looks a lot like the XLF (SPDR Financials) March 23 put buying we noted recently in this piece. It seems that some managers may be speculating that certain sectors have run too far, and are due for some kind of pullback in the next several weeks prior to March expiration.
The Utilities SPDR ETF (NYSE:XLU) was trading at $51.60 per share on Tuesday morning, up $0.30 (+0.58%). Year-to-date, XLU has gained 6.24%, versus a 5.95% rise in the benchmark S&P 500 index during the same period.
XLU currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 14 ETFs in the Utility ETFs category.
Paul 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 ETFTrends.com 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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