Investors Flee UltraShort S&P 500 ETF (SDS) As Earnings Season Starts

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July 18, 2017 1:06pm NYSE:SDS

NYSE:SDS | News, Ratings, and Charts

Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at massive outflows in one of the largest leveraged inverse ETFs, along with renewed interest in technology funds as we get into earnings season.

We have seen some substantial redemption flows lately in a levered Bear fund that we have profiled here from time to time known as SDS (ProShares UltraShort S&P 500), where over $1 billion has left the fund. This move comes as the SPX itself has been trading if not threatening new all-time highs lately.

SPX reached 2463.54 reached on an intraday basis last Friday before some regression back to present levels in stocks. This could be profit-taking in the fund, and someone expressing a view that perhaps being short here has little upside going into core earnings season.

Speaking of earnings, QQQ has pulled in more than $2.6 billion lately. It’s worth noting that NFLX (which is up over 13% today and trading at new 52-week highs) has about a 1.04% weighting in the NDX.

We saw some well timed inflows into QLD (ProShares Ultra QQQ, over $1.2 billion in) ahead of this earnings pop in NFLX and the QQQ, and we remind folks that a slew of other earnings in top components are in the near term (AAPL 8/1, MSFT 7/20, AMZN 7/27, FB 7/26, GOOGL/GOOG 7/24).

The ProShares UltraShort S&P 500 ETF (NYSE:SDS) was trading at $49.26 per share on Tuesday afternoon, up $0.06 (+0.12%). Year-to-date, SDS has declined -18.50%, versus a 10.78% rise in the benchmark S&P 500 index during the same period.

SDS currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #4 of 52 ETFs in the Inverse 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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