Options Traders Are Betting On Continued Upside In Gold Miner ETFs

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January 6, 2017 10:48pm NYSE:GDX NYSE:GDXJ

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Analyst Paul Weisbruch of Street One Financial brings investors his daily fund flows update, which today focuses on some options activity in the two largest gold miners ETFs, as well as continued bullish bets being placed on the biggest emerging markets ETF.


We saw what looks like closing put selling in two popular Gold Miner funds this week, as portfolio managers liquidated positions in January 20 puts in GDX (VanEck Vectors Gold Miners) as well as January 32 puts in GDXJ (VanEck Vectors Junior Gold Miners). The miners have recovered nicely from their mid-December lows as have spot Gold prices in general and it is possible that portfolio managers are spurning hedges in the space going into this month’s options expiration, or possibly looking to purchase higher strike puts for more protection against a move lower, since these options are now well out-of-the-money.

In other activity, just yesterday we mentioned the presence of upside call buyers in the surging EEM (iShares MSCI Emerging Markets) and this type of trading has continued into the end of the week with February 37 call buyers in the product.

Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) closed at $35.40 per share on Friday, down $1.70 (-4.58%). Year-to-date, GDXJ has gained 12.20%, versus a 1.65% rise in the benchmark S&P 500 index during the same period.

GDXJ currently has an ETF Daily News SMART Grade of D (Sell), and is ranked #18 of 29 ETFs in the Precious Metals ETFs category.

Market Vectors Gold Miners ETF (NYSE:GDX) closed at $22.39 per share on Friday, down $0.81 (-3.49%). Year-to-date, GDX has gained 7.03%, versus a 1.65% rise in the benchmark S&P 500 index during the same period.

GDX currently has an ETF Daily News SMART Grade of D (Sell), and is ranked #17 of 29 ETFs in the Precious Metals 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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