ETF/Index options volumes were relatively tame going into the weekend, but we did see some put interest in the Biotech sector via IBB (iShares Nasdaq Biotechnology, Expense Ratio 0.48%).

The August 225 puts were in demand which are well out of the money options but in reality, the ETF has traded as low as a $207 handle to as high as a $266 handle inside of a
quarter in the recent past. The top current holdings in IBB are expected to report earnings in the near term (CELG 7/24, GILD 7/23, AMGN 7/29, BIIB 7/23, and ALXN 7/24), and these top five names make up >37% of the overall underlying portfolio.

IBB is the largest “Biotechnology” focused ETP in the marketplace with >$5 billion in assets under management at the moment, but the fund and its underlying names have been known in the recent past to display extreme volatility and at times uni-directional short term price trending (see short term chart from mid-April until now) but such is the nature of the beast when trading Biotech.

IBB has seen net inflows to the tune of >$200 million now year to date, which if anyone recalls, is a complete 180 from where we were several months back as some holders had begun to bail.

Also in the Biotech space, FBT (First Trust AMEX Biotechnology, Expense Ratio 0.60%) has grown notably to be the second largest fund in the space with about $1.3 billion in AUM. XBI (SPDR S&P Biotech, Expense Ratio 0.35%) is also part of the billion dollar club with $1.1 billion in AUM.

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