We speak about options activity in the REIT space via IYR (iShares U.S. Real Estate, Expense Ratio 0.43%) in our Options Recap this morning, involving July 76 calls which are slightly out of the money at current price levels in the ETF.
IYR has struggled a bit lately, challenged on the upside by both its 200 day and 50 day MA’s, both of which are right around the $76 level. Trading volume has been above normal in recent sessions as well in the product, but fund flows rather flat in the trailing one month with a net of about $13 million leaving the fund during this time period, which is a rather inconsequential amount.
With about $4.3 billion in AUM currently, IYR is substantially smaller than the largest U.S. REIT ETF which is VNQ (Vanguard REIT, Expense Ratio 0.10%) with its impressive asset base of north of $25 billion.
In the trailing one month period for VNQ there has been some notable bleeding however in terms of evident redemption activity, as we see the fund losing more than $765 million via such outflows.
As we have mentioned in the past, when it comes to options trading in the marketplace between these two ETFs, the flow is mainly relegated to IYR and not VNQ. Directionally sensitive traders in the REIT category should also be cognizant of the Bull and Bear products offered here, DRN (Direxion Daily Real Estate Bull 3X, Expense Ratio 0.95%) and DRV (Direxion Daily Real Estate Bear 3X, Expense Ratio 0.95%), as we have mentioned periodically as well.