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Options Traders Are Betting Against Oil & Gas Producer ETFs

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today explores a continued purge in corporate bond funds, some selling in gold ETFs, and new bearish bets rolling in against oil & gas producers.

Outflows continue to build for the third straight day in the High Yield Corporate Bond space, with HYG (iShares HY Corporate Bond) leading the way (and leading all ETPs in net outflows this week), with more than $1.5 billion vacating the fund. Similarly, JNK (SPDR HY Bond ETF) has also seen bloodletting, with about $400 million leaving via redemption flows.

Gold ETFs have seen some liquidation this week as well, and one has to wonder if the sudden sell-off earlier this week in Crude Oil futures has forced people out of positions that they would not have otherwise sold (i.e. HY Bond and Gold longs). Both GLD (SPDR Gold) and IAU (iShares Gold) have seen $250 million and $185 million apiece, respectively, flow out this week via redemption pressure.

Finally, in regards to Oil and related equities, XOP (SPDR Oil & Gas Exploration & Production) options have been active, with June 37 put activity this week. These moves were then followed by an additional plunge in Crude prices, and related stocks such as those included within XOP.

The SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) was trading at $35.97 per share on Friday morning, down $0.23 (-0.64%). Year-to-date, XOP has declined -13.16%, versus a +6.13% rise in the benchmark S&P 500 index during the same period.

XOP currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #20 of 38 ETFs in the Energy Equities 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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