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GranitesShares 3x short ETPs see trading surge of 166 per cent amid January sell-off


ETP provider GraniteShares, which offers a range of 3x short and 3x leveraged ETPs on popular UK, US, and European Stocks, has seen a 166 per cent rise in trading in its range of short ETPs on popular stocks amid the recent market sell off. 

2022 has started with steep declines in major markets, the firm writes. The worst start to a year for the S&P500 Index since 1920, measured at the intraday low on January 24th. The S&P500 is down 9 per cent so far in January and is on course for its worst monthly performance since March 2020, the nadir of the COVID-19 market crash. The VIX, Wall St’s volatility gauge, hit its highest levels since November 2020. 

To date, investors have been selling more speculative assets such as unprofitable technology companies, Cryptocurrencies and Meme stocks, GraniteShares writes.

GraniteShares range of Short ETPs, which are designed to rise in value when the underlying stock or index falls, are seeing a surge of interest as sophisticated investors seek to hedge portfolios against market falls, the firm says. The most active short ETPs have been TESLA (3STS) , NIO (3SNI) , NVIDIA (3SNV), UBER (3SUB) & META (3SFB)

Will Rhind, Founder and CEO at GraniteShares says: “The surge in trading volumes we’ve witnessed on our Short ETPs in January demonstrates increasing willingness by sophisticated investors to take action in volatile markets to hedge risk or to profit from falling prices.”

“Short ETPs are fast becoming a popular product in the sophisticated active investor toolkit as they provide the flexibility needed to help navigate volatile market swings on both the long and short sides.” 

Total trading at GraniteShares hit USD1.7 billion last year across its range of products listed on the London Stock Exchange, Euronext and Borsa Italiana compared to USD130.7 million in 2020. The most popular trades were GraniteShares 3x Long Tesla (3LTS) and GraniteShares 3x Long Rolls-Royce (3LRR) which saw USD581 million and USD255 million traded across the year, respectively. The firm writes that the majority of investors went long with 76 per cent of investors holding long positions compared with 24 per cent who took short positions.

Assets under management increased to USD260 million at the end of 2021 just eight months after hitting the USD100 AUM milestone in April last year. The rapid expansion at GraniteShares has been driven by growing demand from sophisticated investors looking for new products to trade the volatile market conditions, the firm says. 

It achieved record levels of trading in its leveraged and short LSE listed ETPs throughout 2021. In Q3 2021, USD308 million was traded, a 43 per cent increase compared to the volume seen in Q4 of 2020 and the busiest quarter was Q4 with USD593 million.

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