Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today focuses firmly on the sudden spike in volatility amid rising geopolitical conflict.
With the VIX spiking above $15 today on global tensions having to do with North Korea and the Guam situation, it should be no surprise that options trading in the marketplace today is largely dominated with VIX trading.
We have seen not only upside call interest in VIX options themselves but also in ETN VXX (iPath S&P 500 VIX ShortTerm Futures ETN), which has rallied significantly in the past three sessions on very heavy trading volume as well. In spite of challenging performance amid the hangover that typically plagues this fund in terms of contango in the VIX futures market, VXX has still managed to attract assets year-to-date, taking its AUM level above $1.1 billion.
As we mentioned in yesterday’s recap, we saw some investors pull the plug early on SPY, as more than $4.2 billion has been liquidated from the fund even before today’s global equity downdraft.
Buying volatility and selling equities is clearly the name of the game right now, but if recent history is any indicator, the trend won’t last too long.
The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) was trading at $12.72 per share on Thursday morning, up $1.02 (+8.72%). Year-to-date, VXX has declined -50.14%, versus a 10.79% rise in 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.
Paul 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.
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