iShares Russell 2000 (IWM) On Shaky Ground Amid Outflows, Bearish Options Activity

Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at the so-called “vol of vol,” some recent outflows and downside bets on a popular small cap ETF.

Equity inflows continue to be light in choppy trading, as volumes have dried up in some of the major equity index products since last Friday’s VIX “flash” rally to over $17. However, “Volatility of Volatility” or “Vol of Vol” remains high, as the VIX itself is now back above $13 this morning following yesterday’s dip into the $11’s.

In Small-Caps, we have seen some hesitation with September downside puts being snapped up this morning, and with IWM threatening to trade at its 200 day MA for the second time in the past five sessions. More than $700 million has vacated IWM in the past couple sessions via redemptions, adding to the notable outflows year-to-date in the fund which total over $3.8 billion now.

Given this backdrop and amid the options trading in IWM lately, TZA (Direxion Daily Small Cap Bear 3X) remains on our dashboard.

The iShares Russell 2000 Index ETF (NYSE:IWM) was trading at $137.11 per share on Thursday morning, down $0.33 (-0.24%). Year-to-date, IWM has gained 2.41%, versus a 10.81% rise in the benchmark S&P 500 index during the same period.

IWM currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #6 of 36 ETFs in the Small Cap Blend 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.