Citadel Securities says prepare for a reload on levered stock bets

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Or sign-in if you have an account.August is primed to draw back buyers after leveraged ETF assets under management plunged to US$154 billion last month, Citadel Securities data show. Photo by Spencer Platt/Getty ImagesSystematic buyers are getting ready to load up on stocks again after a massive unwind, according to Citadel Securities.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Account“The leverage reset has largely run its course, creating room for systematic strategies to add exposure as volatility falls,” said Scott Rubner, head of equity and derivatives strategy at Citadel Securities. “Breadth is improving, correlation is near record lows, and investors are increasingly willing to pay for upside.”August is primed to draw back buyers after leveraged ETF assets under management plunged to US$154 billion last month, a nearly 42 per cent drop from US$218 billion at the end of June, Citadel Securities data show. The sharpest drop was in the semiconductor space, where leveraged ETFs now hold about US$31 billion of assets. Source: Citadel SecuritiesCanada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againThe firm says the potential for a rebound is building. “The next meaningful mechanical flow may be re-leveraging rather than deleveraging,” Rubner wrote in a note to clients.Individual traders are also returning and were net buyers on the firm’s platform last week, although they’re still paying for protection, he added. Households are logging US$7.5 billion a day in passive ETF inflows while the end of earnings season promises to reopen the corporate buyback window.Companies are now authorized to buy back more than US$1 trillion in their own stock, “the largest amount on record at this point in the calendar,” Rubner said.Altogether, the firm is pointing to demand for stocks rising and investors releveraging.—With assistance from Yiqin Shen.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.