In the first three days of July, volume trends in Leverage Shares’ products across 3 exchanges across Europe – the London Stock Exchange (LSE), the Borsa Italiana (BITA) and Germany’s XETRA – saw divergent volume trends. The LSE in the United Kingdom saw a moderate decline of over 29% after rebalancing in the prior week petered out. Italy witnessed a little over 25% drop in traded volumes. Germany was the outlier with an over 40% increase in volume relative to the previous week.

This differential pattern – wherein the United Kingdom and Italy saw concerted volume trends in direct opposition to overall trends in Germany – has been in place for three weeks now.

Momentum and Regimes

In the United Kingdom, volumes against AI overvaluation entered in steady state while volumes in new thematic directions rose.

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Source: Leverage Shares analysis

Traded volumes in RHM3 rose in tune with convictions in increased defence spending in Europe while CRC3 and GDX3 can arguably deemed as “defensive” convictions in crypto expressed via a a proxy and gold respectively.

HNX3 largely held steady in convictions expressed during the second week after its launch in the UK.

Italy too had a swing in “defence” convictions – plus a few surprises.

Source: Leverage Shares analysis

The spike in ASMS is a novel development that is likely explainable as an expansion of interest in protection from AI overvaluation potentially manifestable as a drop in sales of lithography machines in the offing – a bold bit of positioning that shouldn’t be altogether surprising in Italy; past data analysis had indicated that investors aren’t above opportunism.

Italy’s TSLQ and the UK’s TS3S – while identical – seemed to have different motivations as deduced by volume trends. While the UK structurally elevated conviction over weeks in tandem with Tesla’s stock price trajectory, Italy seemed to have elevated on the back of convictions being expressed over its upcoming earnings – an interesting sign that also manifested in convictions seen in 3BAB.

Historically a product with low traded volumes, the positioning in 3BAB – despite a month-long double-digit percentage dip in Alibaba’s stock price – seems to be on the back of convictions that the company’s upcoming earnings might be well-received, thus potentially making 3BAB cheap to buy into presently. It is likely that conviction in “Alibaba Longs” in the UK, which also witnessed a relative peak after long periods of flatness, is based off similar lines of reasoning.

Meanwhile, the recovery in conviction behind 3RAC comes off the back of a marked improvement in Ferrari’s stock trajectory.

Germany, meanwhile, shows the prevalence of long-established patterns as well as new convictions seen in the other two venues.

Source: Leverage Shares analysis

Like in the UK and Italy, TS3S saw a spike in volumes while conviction in DRM3 rose as a more-balanced expression of the same type of interest that the UK showed in HNX3.

Acceleration Trends

In terms of volumes for the week, LSE traded over five times the volume that Italy’s BITA did which, in turn were nearly 1.6 times that of what XETRA did. The gap between LSE and BITA remains steady while the spike in XETRA brings it closer to BITA. It will be interesting to see if the gap between BITA and XETRA will continue to close.

In week-on-week convictions within the LSE, there were a couple of interesting surprises:

Source: Leverage Shares analysis

NBI and RKL3 – relatively new products in the exchange – have seen an expansion from steady rising volumes. This could be the beginning of a long-term trend wherein new avenues for expressions in AI or SpaceX-adjacent themes might be found by interest, particularly as long-time AI leaders are deemed to be running overbought.

Over at BITA, ASMS and 3BAB are new entrants within well-established recurring themes:

Source: Leverage Shares analysis

SMCI – the ticker for the 2X Long Super Micro Computer ETP in Italy – is a novel bit of positioning off low volumes. This is potentially some advance positioning for the upcoming earnings season.

Meanwhile, XETRA presented some very interesting and contradictory signalling within the same theme:

Source: Leverage Shares analysis

SKOR and KOR3 running into the leaderboard – with the former holding a substantial lead over the latter – indicates some genuine differential in outlook being expressed by investors. Which is protection and which will turn out to be opportunity, of course, remains to be seen.

Potential Trends This Week

In London and Frankfurt, the positioning in light of the upcoming earnings season is a factor of interest. Interest in TS3S is likely to increase as the earnings release draws closer.

In Milan, the positioning seen in ASMS is likely to spread to other exchanges as more information regarding restriction of sales of and service to lithography machines in China unfolds.

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