ProShares UltraShort Crude ETF (SCO) In Focus Amid Bearish Options Bets

Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out bearish bets rolling in on crude oil, along with elevated levels of volatility in U.S. equities.

We have seen some appetite for downside puts in the largest Crude Oil tracker USO, involving the August 8.50 puts lately. This brings to our attention the Levered Bear and Bear ETPs in the space like SCO (ProShares Ultra Short Bloomberg Crude Oil) as well as DWT (VelocityShares 3X Inverse Crude Oil ETN), WTID (UBS ETRACSProShares Daily 3X Inverse Crude ETN), and the much smaller OILD (ProShares UltraPro 3X Short Crude Oil ETF), and SZO (PowerShares DB Crude Oil Short ETN).

Elsewhere, with a couple weeks left until July expiration we will undoubtedly see action in SPY and VXX options as “Volatility of Volatility” or “Vol of Vol” remains elevated in the past couple sessions. The VIX itself traded above its 200 day MA yesterday before being clipped a bit back to current levels ($11.76) but having toiled below $10 for some time and with the SPX compromising its 50 day MA yesterday ahead of core earnings season, we must stay awake here.

The ProShares UltraShort Bloomberg Crude Oil ETF (NYSE:SCO) was trading at $47.43 per share on Friday morning, up $2.74 (+6.13%). Year-to-date, SCO has gained 49.86%, versus a 7.88% rise in the benchmark S&P 500 index during the same period.

SCO currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #10 of 32 ETFs in the Inverse Commodities 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.