Investing

Graniteshares Enjoys Record Week Of Trading In London

Rolls Royce Plane Engine

Thanks to its rolls royce 3x long ETP Graniteshares has enjoyed a record week trading in London.

October has been a record-breaking month for GraniteShares‘ leverage and inverse single stock ETPs.  In part, this has been down to an extraordinary week (5th October to 9th October 2020) when the share price of Rolls Royce increased by 96.5%, marked by moves of 24.7% on the Thursday, 21.6% on the Tuesday, and 14.3% on Friday 9th October. 

GraniteShares, which offers a range of 3x short and 3x leveraged ETPs on popular UK and US stocks listed on London Stock Exchange, which includes exposure to Rolls-Royce, says traders and sophisticated investors traded record volumes of its ETPs, led by interest in Rolls-Royce.  On Tuesday 6 October, London Stock Exchange reported turnover was £1.26 million in the 3x long Rolls Royce ETP (3LRR) and by Friday the daily volume hit £5.06 million with over 431.6 million securities traded.  On the week, the 3x long Rolls-Royce ETP rose by 483.7%.

Turbine engine Rolls&Royce of Boeing aircraft with removed cowl panel

On the back of deteriorating outlook and stressed balance sheet as a result of the Coronavirus crisis, the Rolls-Royce (LSE: RR.), the share price has been under pressure. It hit a 52-week low on 2 October after it announced a deeply-discounted rights issue and commencement of a bond offering as part of its recapitalisation.  However, some investors clearly saw this low as a good entry point and the share price rallied strongly over the week, starting with an 8.6% rise on Monday.  For sophisticated investors and traders, GraniteShares ETPs magnify the daily price moves in the underlying stock and therefore can be a good way to take positions to capture short-term price moves.

GraniteShares 3x Long Rolls-Royce Daily ETP is a collateralised, Exchange-Traded Product (ETP). It tracks, excluding fees and other adjustments, the performance of the Solactive Daily Leveraged 3x Long Rolls-Royce Holdings plc Index that seeks to provide 3 times the daily performance of Rolls-Royce Holdings plc shares.  For example, if Rolls-Royce Holdings plc rises by 1% over a day, then the ETP will rise by 3%, excluding fees and other adjustments. However, if Rolls-Royce Holdings plc falls by 1% over a day, then the ETP will fall by 3%, excluding fees and other adjustments.  

Will Rhind, Founder and CEO of GraniteShares
Image via Forbes.com

Will Rhind, Founder and CEO of GraniteShares, said:

“Rolls-Royce and its employees have had a very difficult year with the collapse in commercial air travel.  It is taking a number of measures to help strengthen its financial position from announced job losses to the hoped-for disposal of non-core assets. 

The recapitalisation, which includes the rights issue, is a core part of these restructuring efforts.  We will know in the coming weeks how successful the recapitalisation has been. 

In the meantime, it is evident that many sophisticated investors have seen the price weakness as a buying opportunity.  The question remains as to whether this is a short-term relief rally or the start of longer-term recovery in the share price.

The ongoing pandemic, the looming US presidential election and no sight of an EU-UK trade deal are among many factors that suggest we will see continued above-average levels of volatility in individual stocks and markets over the coming months. 

Volatility creates opportunities for sophisticated investors, both to implement directional views and to hedge risks.  Products such as our short and leveraged single stock ETPs can help them implement different strategies. 

The volume of our short and long single stock ETPs traded has picked up significantly since the end of the summer with value traded being 398% higher in September than it was in August, and October is already proving to be an even busier month.” 

GraniteShares Short and Leveraged Single Stock Daily ETPs on UK companies

Underlying stock+3x Long-3x Short
AstraZeneca3LAZ3SAZ
BAE Systems3LBA3SBA
Barclays3LBC3SBC
BP3LBP3SBP
Diageo3LDO3SDO
Glencore3LGL3SGL
Lloyds Banking Group3LLL3SLL
Rio Tinto3LRI3SRI
Royal Dutch Shell3LRD3SRD
Rolls-Royce3LRR3SRR
Vodafone3LVO3SVO

GraniteShares Short and Leveraged Single Stock Daily ETPs on US technology companies

Underlying stock+3x Long-3x Short
Alphabet3LAL3SAL
Amazon3LZN3SZN
Apple3LAP3SAP
Facebook3LFB3SFB
Microsoft3LMS3SMS
Netflix3LNF3SNF
NVIDIA3LNV3SNV
Tesla3LTS3STS
Uber3LUB3SUB

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