U.S. markets close in 1 hour 40 minutes
  • S&P 500

    +29.50 (+0.70%)
  • Dow 30

    +213.24 (+0.62%)
  • Nasdaq

    +103.85 (+0.76%)
  • Russell 2000

    +24.15 (+1.08%)
  • Crude Oil

    +0.17 (+0.26%)
  • Gold

    +16.10 (+0.89%)
  • Silver

    +0.07 (+0.25%)

    +0.0092 (+0.77%)
  • 10-Yr Bond

    +0.0200 (+1.28%)

    +0.0098 (+0.71%)

    -0.4050 (-0.37%)

    +931.49 (+1.64%)
  • CMC Crypto 200

    +55.16 (+3.84%)
  • FTSE 100

    +53.54 (+0.76%)
  • Nikkei 225

    +26.45 (+0.09%)

Where Traders Love Frackers

ETF Professor

The S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOPTR), as is often the case, is responding to oil prices. This month, that is not a good thing as the index is lower by more than 13.50 percent over the last 30 days as oil prices have tumbled.

What Happened

Exploration and production, also known as “frackers,” are extremely unpopular with investors at the moment. The group is so out of favor with investors today, with oil residing below $65 per barrel, that it is more unloved than oil was at $10 per barrel more than 20 years, according to Bloomberg.

The S&P Oil & Gas Exploration & Production Select Industry Index reflects investors' disdain for frackers. Not only is that index tumbling this month, but it is also the midst of a major bear market, residing more than 42 percent below its 52-week high.

Why It's Important

While investors are scurrying out of fracking stocks, some data points adventurous traders are taking an aggressive approach to the group. The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares (NYSE: GUSH) is the epicenter of that aggressiveness. GUSH attempts to deliver triple the daily returns of the S&P Oil & Gas Exploration & Production Select Industry Index.

In other words, GUSH has been a pain trade this month as the leveraged exchange-traded fund is lower by 43.8 percent since May 1. Predictably, that is leading to some elevated activity in GUSH. For the five days ending May 29, volume in GUSH was almost 31 percent above the trailing 20-day average, good for the seventh-biggest increase among Direxion's leveraged ETFs, according to issuer data.

What's Next

GUSH's recent volume spike only tells part of the story. Other data points confirm traders are piling into the leveraged bull fund. On Wednesday, GUSH saw inflows of $10.44 million, good for the highest total among all Direxion leveraged ETFs. That extended the fund's five-day inflows run to nearly $75 million, more than quadruple the next-best ETF in the Direxion suite.

Over the past 10 days, GUSH is the top asset gatherer among Direxion's leveraged ETFs while its bearish counterpart, the Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares (NYSE: DRIP) has seen outflows of $11.71 million during that period.

Related Links

An EM ETF Rebound Candidate

This ETF Can Drive Higher

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.