Traders Are Betting On Further Downside For Oil & Gas Producers

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out continued weakness among energy producers amid the recent oil meltdown, along with big inflows into a large dividend-focused fund.

Energy equities have had a bit of a hard time of late, since crude oil prices started to slide at the beginning of 2017, and this week we have seen options investors positioning for more potential downside in XOP (SPDR Oil & Gas Exploration/Production). The June 33 puts have traded good size this week, with over 165,000 contracts in XOP.

Although these options are out-of-the-money at current levels, there are still about three months left until expiration. It’s worth noting that XOP traded in the $34’s just before Trump’s election last year, so a downturn to the $33 range certainly isn’t out of the question.

Elsewhere, we have talked about inflows into S&P 500 funds like SPY and IVV, and we have also seen good sized inflows into VIG (Vanguard Dividend Appreciation). VIG’s top holdings include higher-yielding mega cap names like 1) MSFT (4.41%), 2) JNJ (3.95%), 3) PEP (3.74%), 4) KO (3.47%), and 5) MCD (2.71%).

The SPDR S&P Oil & Gas Explore & Prod. ETF (NYSE:XOP) was trading at $36.67 per share on Thursday afternoon, down $0.3 (-0.81%). Year-to-date, XOP has declined -11.47%, versus a 6.74% 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 #21 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 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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