A trader works on the trading floor on the last day of trading before Christmas on the New York Stock Exchange (NYSE) in Manhattan, New York, USA, December 23, 2021. REUTERS / Andrew Kelly
NEW YORK, March 2 – The battered shares of Russia’s Van Eck ETF (RSX.Z) are attracting a surge of interest from traders and making comparisons to last year’s madness in so-called memes.
Designed to track the performance of the MVIS Russia Index (.MVRSXTR), the ETF has fallen 65% in the past two weeks as Russia’s invasion of Ukraine and Western sanctions spark a huge movement in country-related assets.
Its sharp decline has boosted ETF’s stock and options trading, much of which is due to retail investors, analysts said.
As the price of the ETF fluctuated sharply – it fell by as much as 15% before recovering to trade up to 6% during the day – the volume of trading in ETF shares jumped to 27 million by 14:30 (1930 GMT) , or about twice the average daily amount, according to Trade Alert.
ETF options were even busier, with 211,000 traded contracts, or four times the expected volume.
Garrett DeSimone, head of OptionMetrics, said some of the volume appears to be boosted by traders trying to profit from the heightened stock volatility.
“These high levels of volatility are exceptional, making the VanEck Russia ETF behave like meme stocks,” he said.
“Retail definitely seems to have its fingerprints on RSX options trading today,” DeSimone said.
Sentiment was mixed, with some traders betting on a quick recovery, while others hoped for a continued decline in shares based on the choice of traded options contracts.
The closure of Russian markets for the third day in a row created another challenge for the ETF’s valuation, which led to a deviation of the trading price far from its net asset value (NAV) – or the value of each ETF share based on its share of the underlying asset fund, analysts said.
On Monday, ETF shares ended the day with a 178% premium over its NAV, according to VanEck.
“This makes stock trading much more speculative,” said Todd Rosenblut, head of ETF and mutual fund research at CFRA Research.
Report by Saqib Iqbal Ahmed; Edited by Ira Yosebashvili and Jonathan Oatis
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