ETF Chart of the Day: Oil Slicks

ETF Trends

XOP (SPDR Oil & Gas Exploration & Production, Expense Ratio 0.35%) options were very active yesterday with December 70 put buyers (the ETF had quite an intraday range from above $72 and trading below $70 at one point intraday on Wednesday).

This morning in the early going XOP is taking it on the chin, trading below $70 once more and now well off mid-October highs. Trading volume has been exceptionally high in the ETF as well, but interestingly the fund has attracted about $150 million in net inflows in recent sessions despite the presence of put buyers.

Being equal weighted, XOP exposure ranges from Large Cap (20.43%) to Microcap (13.81%), and has sizable exposure to Mid (30.16%) and Small Caps as well (29.29%), so there are a number of Oil & Gas names in the portfolio that may not jump out as immediately recognizable to some. For instance, top holdings are currently CRZO (1.61%), NFX (1.58%), RRC (1.57%), NBL (1.54%), and LPI (1.54%).

Despite its level of specialty, the fund is rather large in terms of assets now ($1.1 billion in AUM and the fifth largest ETF in the Energy Equities category in terms of overall AUM). It doesn’t hurt that the options trade well and
rather regularly and we periodically see speculators and hedgers use the options in size to establish positions as we did yesterday.

In the Exploration and Production space there are some other ETFs that should be watched here as well as the sector loses steam such as the $438 million IEO (iShares U.S. Oil & Gas Exploration & Production, Expense Ratio 0.48%) which has a very different index make up than the equal weighted XOP. Top holdings in IEO are OXY (14.19%), APC (8.50%), and PSX (7.20%) and the fund has a clear large cap slant (55.59%) and mega-cap (14.19%).

PXE (PowerShares Dynamic Energy Exploration & Production Portfolio, Expense Ratio 0.60%) also comes to mind here, and this fund has raised $104 million in AUM at this point.

SPDR S&P Oil & Gas Exploration & Production ETF

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XOP

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