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Rolls Royce bulls buy up leverage ETPs, as ‘short’ Lloyds sees a spike

Published 22/05/2024, 14:40
© Reuters.  Rolls Royce bulls buy up leverage ETPs, as ‘short’ Lloyds sees a spike

Proactive Investors - Ahead of Rolls-Royce Holdings PLC (LON:RR) full-year results on Thursday there’s been an upsurge in bullish investors taking leveraged positions in the British engineer.

The ‘Rolls-Royce 3x Long daily’ exchange-traded product (ETP), provided by GraniteShares, has seen inflows resulting in a 271% rise in the value of assets under management (AUM) to around £50 million, the ETP specialist has claimed.

At the same time, Granite says there’s been a spike in its customers going short in Lloyds Banking Group PLC (LON:LLOY) – with its Lloyds 3x Short daily ETP up 284%, albeit to a much smaller value (less than £0.5 million).

It comes as Granite’s single-stock leveraged and ‘inverse’ (or ‘short’) ETPs have more than doubled in a year, with the value of its suite of products up 134%.

More than $4 billion of value is now held within Granite’s ETP products, it highlighted.

Evidently, retail and day traders see the appeal of products that promise upsized exposure on the exchange – without using a CFD or spread-better - and without the trade-stopping threat of margin calls.

“Analysis reveals investors are equally split on whether to go long on stocks in the expectation share prices will rise or short in the expectation they will continue to underperform,” Granite said in a note.

Granite also has single-stock ETPs for London’s other big names including AstraZeneca (NASDAQ:AZN), BAE Systems (LON:BAES), Barclays (LON:BARC), BP (LON:BP), Shell (LON:SHEL), and Vodafone (LON:VOD).

Investors should note that Granite’s leveraged ETPs are designed to be ‘daily’ trackers, and therefore the ETP prices won’t precisely match underlying stock movements over longer periods of time.

Read more on Proactive Investors UK


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