fbpx
QQQ
-4.09
344.69
-1.2%
DIA
+ 0.75
336.04
+ 0.22%
SPY
-1.28
414.14
-0.31%
TLT
-0.44
138.92
-0.32%
GLD
-0.73
164.15
-0.45%

A Fabulous Time For This FANG ETN

February 28, 2020 4:30 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
A Fabulous Time For This FANG ETN

Investors have received the memo that the FANG stocks — Facebook Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix INc. (NASDAQ:NFLX) and Alphabet Inc (NASDAQ:GOOG) — have been decimated this week.

For their parts, Alphabet and Amazon have been jettisoned from the $1 trillion club and while that will likely prove to be a temporary exclusion, there's no getting around recent FANG weakness.

What Happened

Of course, bearish plays on the technology and communication services sectors have been working and the one that's dedicated to shorting FANG, the MicroSectors FANG+ Index -3X Inverse Leveraged ETN (NYSE:FNGD), is really working.

FNGD entered Friday with a gain of 52.5% over the past week. The inverse exchange traded note follows the NYSE FANG+TM Index, which “includes 10 highly liquid stocks that represent industry leaders across today’s tech and internet/media companies,” according to the issuer. “The index is equally weighted, providing a unique performance benchmark that offers investors a value-driven approach to technology investing. Unlike market capitalization weighted indices, which can be dominated by a few large stocks, an equal-weighted index offers for a more diversified portfolio.”

See Also: How To Deal With Chip Stocks Right Now

Why It's Important

For the uninitiated, FNGD may be flying under the radar relative to other bearish ETFs, but its average daily volume is decent at over 628,000 shares and at time of writing Friday afternoon, the turnover in the ETN is roughly triple the daily average.

There are other signs of increased demand for FNGD. MicroSectors parent REX Shares earlier this week upsized FNGD by another $100 million to accommodate more traders. That's the sixth upsizing of the product since it debuted in January 2018.

“Despite a strong tech-led rally to start 2020, we’ve seen a considerable pullback in the equity markets. Investors, seeking a hedge against the recent volatility, have turned to the short -3X FANG ETN (FNGD),” said Scott Acheychek, President of REX Shares. “The increase in demand for FNGD has led to another upsizing event – marking the sixth time our partners at BMO have increased the number of notes outstanding since launch.”

What's Next

If the coronavirus issue ebbs and the long-awaited V-shaped recovery materializes, it's reasonable to expect that FNGD will be punished.

Fortunately, REX Shares addresses the potential for that event with FNGD's bullish counterpart, the MicroSectors FANG+ Index 3X Leveraged ETN (NYSE:FNGU). Underscoring its potential for big gains or losses in short time frames, FNGU is lower by 45% this week.


Related Articles

Are Genomic Stocks The Next FANG Stocks?

Some of the best performing ETFs in 2020 have been the Ark Funds, actively managed ETFs led by Cathie Wood. A long-time Tesla Inc (NASDAQ: TSLA) and technology stock bull, Wood is now betting heavily on genomic stocks. read more

FANG+ Index Trading Below Its Recent High; Opportunity to Buy or Sell?

Some of the largest U.S. tech stocks in the NYSE® FANG+™ Index are trading below their recent highs. Is this an opportunity to buy or sell? read more

The FANG Index Hits A New All-Time High

The technology and consumer discretionary stocks that make up the NYSE® FANG+™ Index are pushing the index to new highs. read more

Amazon Stock Runs Up Towards Resistance: Technical Levels To Watch

Amazon Inc. (NASDAQ: AMZN) shares traded higher on Friday. The stock was trending on social media websites, as news spread over the failed union vote at the company's Alabama warehouse.  read more