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A man spends sixty years building a conglomerate, two decades warning the world about derivatives, and a brief retirement before someone launches an options ETP on his company. The ETP industry does love irony.
IS Berkshire Hathaway Options ETP (BRKY)
Warren Buffett built one of the great fortunes in financial history while repeatedly, vocally, and at considerable length describing derivatives as “financial weapons of mass destruction.” He said this not once but over two decades, in shareholder letters and interviews, in prose that reads more like an Old Testament prophet than a fund manager. He then stepped down as Berkshire's CEO, handing the keys to Greg Abel, and quietly receded to his role as chairman.
This week, someone listed an options-based ETP on Berkshire Hathaway.
I want to be clear that I am not criticising the product. Options ETPs are legitimate instruments. Berkshire Hathaway is a legitimate underlying. I am simply noting that somewhere in this transaction, there is a joke so complete that it barely needs commentary. But needs must!
IS UnitedHealth UNH Options ETP (UNHY)
UnitedHealth is under a Department of Justice investigation into its Medicare billing practices. Its CEO stepped down abruptly. Its stock has fallen roughly 55% from its all-time highs, making it one of the more dramatic collapses in recent memory for a company that was, not so long ago, a reliable cornerstone of every institutional healthcare allocation.
This is, apparently, the moment to launch an options ETP on it.
Timing is everything in product development. The timing here is “while the underlying company is navigating the most publicised crisis in its history.” There is a version of this story in which the launch team sees an opportunity in elevated implied volatility. There is another version in which they simply committed to the calendar and decided the news cycle was someone else's problem.
IS Robinhood HOOD Options ETP (HOOY)
Robinhood built its reputation by democratising access to options trading for retail investors. This was broadly presented as a public good. There were, at the time, some questions about whether giving unsophisticated retail investors frictionless access to leveraged derivatives was quite the service it was dressed up as. Those questions were set to one side as the platform grew, the revenues accelerated, and the analysts upgraded.
And now there is an options ETP written on Robinhood itself.
The company that brought options to everyone is now the underlying of an options product. The circle is complete. Someone, somewhere, has written a derivative on the world's most famous democratiser of derivatives. It is recursive in a way that only finance achieves, and I mean that as something approaching a compliment.
LS 3X Long NuScale Power ETP (SMR3) and LS 3X Long Oklo ETP (OKL3)
Nuclear energy is having a genuine moment. The AI infrastructure buildout has created real, structural demand for reliable, carbon-light power, and small modular reactors have attracted serious capital from serious people. The thesis, broadly, is not unreasonable.
NuScale Power is one of the more discussed names in this space. It is also, at present, a pre-revenue company burning through cash at a rate that would make an auditor visibly uncomfortable. Its stock oscillates in double-digit percentages across consecutive sessions with what can only be described as commitment. This is the company that now has a 3x daily leveraged ETP.
Oklo sits alongside it. Sam Altman chaired the board until stepping down to manage a conflict of interest with his other endeavours. The stock is down dramatically from its highs. There are partnerships, regulatory approvals, and plans for a first-of-kind reactor. There is not yet a single commercial watt of electricity generated by an Aurora reactor. That company also now has a 3x ETP.
I am not saying this is reckless. I am saying it occupies that narrow band of investments that will look either prescient or instructive in retrospect, with very little comfortable ground between the two.
IS 75/10/15 Multi Asset Growth ETP (GRWY)
Seventy-five percent equities. Ten percent bonds. Fifteen percent alternatives. Diversified. Balanced. Institutionally sensible. Listed in the same batch as a 3x leveraged ETP on a pre-revenue nuclear company, an options product on the world's most prominent critic of options, and a derivatives wrapper around the democratiser of derivatives.
I look at GRWY and feel this is the type of product that initiated the ETP boom.
Not every product has to be a statement. Not every launch has to court a narrative. Sometimes you can hold equities, bonds, and a modest allocation to alternatives, and let the 3x nuclear ETPs do whatever 3x nuclear ETPs do.
I respect them considerably.
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