Earlier this week, my article Gold – Time To Get Long Again spoke about some of the ETFs provided by BetaPro. A lot of these ETFs are starting to gain in popularity, especially the Bear ETFs that appreciate by 200% of the underlying asset’s decline. However, there’s one ETF that is stealing the show.

The NYMEX Crude Oil Bear Plus ETF (TSE:HOD) has been in existence only since the beginning of the year. It offers investors 200% short exposure to the NYMEX light sweet crude oil futures contracts (next month delivery – essentially spot price). Buyers of this ETF have a bearish outlook on crude oil.

What is so special about this ETF?... Volume. The volume traded for this ETF has increased exponentially this year. The chart below shows the growth in the daily volume traded (using a 7-day rolling average basis) for this ETF, as well as the following ETFs: HXD (TSX 60 Index Bear), HFD (TSX Financials Index Bear), HBD (Gold Bullion Bear), HDN (Natural Gas Bear).

The HOD ETF has experienced a HUGE increase in volume since being issued – most of the increase has come since the end of April. The comparable bear ETFs barely show up on the chart, so below I’ve also included the actual percentage change in daily volume since January of this year.

Incase you thought that this phenomenon may be crude oil specific, the HOD ETFs (NYMEX Crude Oil Bull Plus ETF) have “only” increased 6,000% since the end of January – one tenth of the Bear ETF's increase.

It’s also not just the percentage increase that’s impressive, but the actual number of units traded on a daily basis is surprisingly large. The average daily volume (7-day rolling average) for the HOD ETF is now over 4 million units. The dollar value corresponding to this volume is a shocking $28,000,000 per day. That places this brand new ETF in the upper echelon of TSX activity – on par with likes of Nortel, National Bank, and TransCanada.

What could all this mean? Quite simply, it looks like there is an awful lot of money that is looking to short crude oil. It could either be hedgers trying to hedge their exposure to any oil correction, or speculators trying profit from a decline in oil prices. Either way, a large number of people believe we could be in for a correction… and that number is increasing exponentially. 

Disclaimer: Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.