Traders Are Getting Bullish on This Oil & Gas ETF

Paul Weisbruch’s daily look at money flows in and out of high-profile ETFs includes a continued surge in financials and small caps, and a perhaps surprising bullish bet on an oil & gas exploration fund.

SPDR Sector funds like XLF (Financials), XLI (Industrials), XLV (Health Care) and XBI (Biotech) have been in style lately, reeling in significant lump sums of new assets via creation, and IWM (Russell 2000) continues to pile in money as well (over $4.6 billion in) on new highs in the underlying Index.

On the other hand, XLK (Technology) has seen some outflows during this same time frame. In XLF, we had mentioned upside call buying from the entire rise from less than $20 in the ETF to present levels above $22, and this trend has not abated this week. We’ve seen size activity in the March 23 calls in the product, suggesting some longer-term bullish sentiment is in the works.

In other action, we saw notable upside call activity in XOP (SPDR Oil & Gas Exploration & Production ETF) yesterday consisting of March 42 strikes trading. While these options are considerably out-of-the-money at current levels around $38.50, there is still of course more than 3 months left until expiration on these.

XOP shares were up $0.35 (+0.92%) to $38.51 per share in Thursday morning trading. Year-to-date, the fund that boasts more than $2 billion in AUM has gained 27.6%, nearly quadrupling the return of the benchmark S&P 500 index during the same period.


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.