The Bullish Dollar ETF (UUP) Was Briefly Halted After The ETF Ran Out Of Shares

strong-dollarThe market has been heating up in the US Dollar as investors have seen huge activity in the Bullish US Dollar ETF (UUP).  Investors were surprised today to find out the ETF ran out of shares during trading and was halted for a brief moment. 

Matt Phillips From The WSJ Reported Today That, “Trading of the U.S. Dollar Index Bullish Fund, known as the UUP, was halted this morning after the company announced that the company was waiting on a filing it had made to government agencies back on Dec. 8 to create 240,000,000 new shares of the ETF. Why did the trading have to stop?” “The Fund issued all of the remaining Shares to its Authorized Participants,” according to an SEC filing. Translation? They ran out of shares of UUP as investors took bullish positions on the dollar of late. Oscar Gruss chief executive Michael Shaoul spotlighted the phenomenon in a trading note today, citing it as a demonstration that “there has been a dramatic turn in sentiment towards the USD.” He writes:

“This instrument has been massively traded in recent days with far greater speculative flows into it than were seen in the much longer “flight to safety” rally in the DXY a year ago. Nevertheless with a total cap of $3 Bln it cannot be said to be a crowded trade, given the scale of the USD market, but rather a powerful indication that sentiment has changed decisively in recent days.”

The investment (UUP) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Long US Dollar Futures index. The index is comprised solely of long futures contracts. The futures contract is designed to replicate the performance of being long the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

The investment (UDN) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Short US Dollar Futures index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Chart for PowerShares DB US Dollar Index Bullish (UUP)

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