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Big Bearish Options Trade In Junior Gold Miners Pays Off

Analyst Paul Weisbruch of Street One Financial points out some big moves in some well-known ETFs over the last couple days, along with a highly profitable bearish options bet made this week.

The story in the past forty-eight hours has been sudden weakness in Crude Oil and related tracking ETFs like USO (down over 4% in past two sessions) as well as pressure in Emerging Markets across the board. Also recall that yesterday we pointed out February downside put buyers in EEM (iShares MSCI Emerging Markets) and this segment has been hit rather hard on higher rate prospects.

Precious Metals prices are sinking even faster this morning, also presumably on higher interest rate prospects after the FOMC quarter point raise yesterday, and we see benchmark ETFs like GLD (Gold) and SLV (Silver) for example trading at new recent lows.

UUP (PowerShares U.S. Dollar Index Bullish) is surging over 1% today once again (we highlighted what now looks like a buying opportunity and some upside call buying just last week in UUP) as it trades at new highs today in this rate environment following yesterday’s FOMC meeting.

Finally, GDXJ (Junior Gold Miners) January 32 puts traded more than 217,000 times earlier this week which is a huge trade for the name — and also was well-timed given the plunge there in the past forty-eight hours.

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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