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Big Money Is Betting On A Renewed Bounce For Natural Gas Funds

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today focuses on relentless upside bets on financials, as well as major bets rolling in hoping for a big bounce in natural gas prices.

We continue to see upside call activity in XLF (SPDR Financial) as the sector ETF continues to flirt with new highs, specifically involving the March 25 strikes. Year-to-date XLF has pulled in over $1.3 billion in new assets via inflows.

Elsewhere, most of the ETF options activity this week has been confined to portfolio managers readjusting hedges in portfolios by selling out-of-the-money puts and in some cases rolling up to higher strikes for adequate protection given the freight train rally that continues in equities.

In other activity, we have seen some considerable inflows into a levered Bull Natural Gas related ETN lately, UGAZ (VelocityShares 3X Long Natural Gas ETN) with more than $220 million entering this fund via creation flows. Natural Gas prices have been hammered this week on heavy trading volume in both UGAZ and UNG (U.S. Natural Gas) notably.

The VelocityShares 3X Long Natural Gas ETN (NYSE:UGAZ) was trading at $15.06 per share on Thursday afternoon, up $0.79 (+5.54%). Year-to-date, UGAZ has declined -67.40%, versus a 5.63% rise in the benchmark S&P 500 index during the same period.

UGAZ currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #17 of 21 ETFs in the Leveraged Commodities 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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