ProShares ETFs - with volume through the roof, who are the new leaders? - TradeRadarOperator

Sign Up | Log In | What is SocialPicks?

ProShares ETFs - with volume through the roof, who are the new leaders?
Feb 25, 2009 01:52 AM UTC

TradeRadarOperator

Return	Risk
-46.60%	MID

Tracked Blogger

Profile & Performance

Subscribe to author

Symbol	Sentiment	Start	Return	Closed
UCO	n/a
QID	n/a
SKF	n/a
UYG	n/a
UGL	n/a

Via Trade Radar:

Last summer (June 2008) I wrote a post titled "ProShares ETFs - Why trading volume makes a difference."

Since then, there have been two situations that suggest it might be a good time to look at trading volume again: ProShares has created a half dozen new ETFs that weren't in our previous analysis and market conditions have taken a further turn for the worse with the S&P 500, for example, going from roughly 1325 to under 800.

Below we present a table contrasting average daily volume in the year leading up to June 25, 2008 with average daily volume in the eight months since June 25, 2008. It is sorted in descending order based on the latest volume numbers.

<th>Symbol</th><th>Name</th><th>Avg Daily Volume prior to 6-25-08</th><th>Avg Daily Volume since 6-25-08</th>

UYG	Ultra Financials	3,778,258	112,176,547
SSO	Ultra S&P500	2,368,347	56,212,929
SDS	UltraShort S&P500	10,640,286	43,730,513
QID	UltraShort QQQ	20,042,465	38,670,681
QLD	Ultra QQQ	4,171,179	31,438,395
SKF	UltraShort Financials	3,778,876	30,151,740
DUG	UltraShort Oil & Gas	3,703,700	20,425,378
DIG	Ultra Oil & Gas	162,924	13,143,336
DDM	Ultra Dow30	528,774	12,160,807
DXD	UltraShort Dow30	2,454,753	11,606,795
SRS	UltraShort Real Estate	892,856	11,143,286
URE	Ultra Real Estate	81,689	9,003,131
TWM	UltraShort Russell2000	4,337,620	7,580,650
UCO	Ultra DJ-AIG Crude Oil		7,238,102
UWM	Ultra Russell2000	475,894	4,743,293
UYM	Ultra Basic Materials	27,550	4,714,658
SMN	UltraShort Basic Materials	390,431	3,192,335
FXP	UltraShort FTSE/Xinhua China 25	2,260,873	2,635,880
EEV	UltraShort MSCI Emerging Markets	563,881	2,516,679
TBT	UltraShort Lehman 20+ Year Treasury	156,322	1,953,684
SH	Short S&P500	174,924	1,137,686
MZZ	UltraShort MidCap400	451,919	1,064,628
MVV	Ultra MidCap400	123,451	1,059,239
DOG	Short Dow30	157,933	776,583
USD	Ultra Semiconductors	65,585	389,699
PSQ	Short QQQ	100,591	316,107
EFU	UltraShort MSCI EAFE	104,662	276,254
ROM	Ultra Technology	52,511	253,786
UGL	Ultra Gold		213,400
RWM	Short Russell2000	43,922	198,642
SCC	UltraShort Consumer Services	27,736	149,963
REW	UltraShort Technology	37,704	139,168
SAA	Ultra SmallCap600	14,532	112,946
PST	UltraShort Lehman 7-10 Year Treasury	40,535	104,673
SSG	UltraShort Semiconductors	24,423	90,478
SDD	UltraShort SmallCap600	60,777	87,470
SIJ	UltraShort Industrials	17,818	71,930
AGQ	Ultra Silver		69,143
UKK	Ultra Russell2000 Growth	11,173	62,808
RXL	Ultra Health Care	6,507	54,273
UVT	Ultra Russell2000 Value	7,349	51,201
EUM	Short MSCI Emerging Markets	33,837	48,629
MYY	Short MidCap400	64,646	47,522
UVG	Ultra Russell1000 Value	4,665	46,306
SDP	UltraShort Utilities	28,313	44,947
SZK	UltraShort Consumer Goods	13,972	43,940
SKK	UltraShort Russell2000 Growth	39,434	41,554
UPW	Ultra Utilities	10,043	41,375
SJH	UltraShort Russell2000 Value	40,356	40,062
EFZ	Short MSCI EAFE	12,423	39,222
UKF	Ultra Russell1000 Growth	17,312	37,990
UXI	Ultra Industrials	6,775	36,765
UKW	Ultra Russell MidCap Growth	6,863	32,999
SFK	UltraShort Russell1000 Growth	8,403	27,882
EWV	UltraShort MSCI Japan	24,811	26,478
SDK	UltraShort Russell MidCap Growth	9,104	24,653
UVU	Ultra Russell MidCap Value	3,433	21,522
UCC	Ultra Consumer Services	4,264	21,220
SJF	UltraShort Russell1000 Value	6,667	19,651
UCD	Ultra DJ-AIG Commodities		16,787
UGE	Ultra Consumer Goods	4,853	15,250
YCL	Ultra Yen		14,143
SBB	Short SmallCap600	7,392	13,601
ULE	Ultra Euro		12,610
LTL	Ultra Telecommunications	1,596	9,038
SJL	UltraShort Russell MidCap Value	7,639	7,957
RXD	UltraShort Health Care	4,822	6,953

The first thing that jumps out is that acceptance of these ETFs has really skyrocketed. For the more popular ETFs, average daily trading volume is up orders of magnitude higher compared to last summer.

Look who's on top of the list: Ultra Financials (UYG). Wow, people have been trading the heck out of this ETF! Its UltraShort equivalent (SKF) has only half the volume though it seems to get twice the publicity. With volume in the bullish ETF double the volume in the bearish ETF, should we assume the bottom for financial stocks has been reached?

The UltraShort QQQ (QID) was by far the ETF with the highest average daily volume in our last survey. This ETF has now dropped to fourth place and its bullish Ultra counterpart, SDS, has become popular enough to boast volume nearly as high as QID.

Some of the new ETFs have also made a big splash. The Ultra DJ-AIG Crude Oil ETF (UCO) didn't even exist last summer but is now trading over 7M shares per day. And this is despite the fact that oil is clearly not in a bull market at the moment. Interestingly, the Ultra DJ-AIG Commodities ETF (UCD), which is comprised of up to 15% of oil futures, is pretty much being neglected, trading less that 17,000 shares a day. Also in the commodities sector and a new entry since our first post, the Ultra Gold ETF (UGL) is now trading a respectable 200,000 shares per day.

I am also struck by the fact that there is so much volume for the Ultra (bullish) ETFs in the top half of our list. With so much doom and gloom hanging over the markets since last summer, I had expected to see the UltraShort (bearish) ETFs become the volume leaders. In some cases, the opposite occurred as we pointed out when discussing UYG and SKF above. In many cases, however, volume is running more or less even between the Ultra and UltraShort ETFs.

In our last post, we made a few generic points about these ETFs and the impacts of trading volume: that higher volume generally leads to narrower bid/ask spreads, higher volume often results in tracking of the underlying index more closely and that higher volume can allow fees to be spread across more shares thus reducing expenses for individual holders. All these still hold true. Back then, I suggested investors should limit themselves to the top third of the list. As volume has grown, though, it now appears that the entire top half of the list looks pretty safe to trade.

Read the rest of original post »

Add Comment

Be the first to comment on this story and earn 2 points.

Your Comment

IN THE PRESS

None of the information contained on SocialPicks.com constitutes a recommendation by SocialPicks or its users that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. SocialPicks is not responsible for the posts, discussions, and recommendations of the users on the Site. SocialPicks does not provide investment advice. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the website. SocialPicks' users' past results are not necessarily indicative of future performance. Neither SocialPicks nor any of its users guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the website. You understand and agree that you use the Site and Services at your own discretion and risk and that you will be solely responsible for any damages that arise from such use. Before acting on any information contained on the website, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.