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ETF Chart of the Day: An ETF Issuer


Today we are speaking more about an individual listed equity than a particular ETF, but it is a company that is fully vested in the ETF industry itself, WisdomTree Investments, Inc. (WETF). The stock has traded extraordinary volume in the past couple sessions (5-7 million share range versus ADV of 1.93 million shares) and we witnessed what appears to be protective put buying in the name yesterday.

Specifically, the January 17.50 puts traded actively yesterday in good size (32,565 contracts versus open interest of 332 contracts) which are in the money at these price levels and appear to be a bearish bet against the stock in the near term.

It is no secret that WETF has enjoyed a successful year in terms of growing in size as an ETF fund company thanks to an overflow of new assets from ETF investors in some cases, such as DXJ (WisdomTree Japan Hedged Equity, Expense Ratio 0.48%).

The fund has basically become a household name among institutional managers in no time flat, and averages more than 5 million shares traded on a daily basis now.

Other prominent funds that the company manages in the ETF space are DEM (WisdomTree Emerging Markets High Yielding Equity, Expense Ratio 0.63%) with $4.8 billion in AUM, DGS (WisdomTree Emerging Markets SmallCap Dividend, Expense Ratio 0.64%, $1.7 billion in AUM), DLN (WisdomTree LargeCap Dividend, Expense Ratio 0.28%, $1.7 billion in AUM) and ELD (WisdomTree Emerging Markets Local Debt Fund, Expense Ratio 0.55%, $1.2 billion in AUM).

At last count, the company has 55 individual ETFs listed in the U.S., across a variety of strategies ranging from Emerging Markets based, Dividend Equity, Currency Hedged Equity, and even Managed Futures to name a few. With WETF expected to release quarterly earnings around the 24th of January, this options trade is interesting since the January options expire on 1/17/13, prior to that earnings release.

In any case, given the stock’s meteoric rise in 2013 (it traded with a $5 handle this time last year), it is not surprising to see some caution at these levels and perhaps profit taking among longs going into year’s end.

WisdomTree (WETF)

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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