Learn the trade here. Make it on tradeMONSTER

Options Trading News

August 20, 2012  Mon 10:03 AM CT

XOP: SEE CHART GET CHAIN FIND STRATEGIES

A huge put trade in the SPDR Oil & Gas Exploration & Production fund is the biggest transaction on our monitors so far today.

Our Depth Charge monitoring system detected the purchase of 62,136 of the October 48 puts for $1.05. A block of 82,833 of the September  49 puts traded around the same time at the $0.56 bid price, indicating they were sold. Volume was below open interest in the September puts but not October.

The sale in September could be to open or to close. If it is to open, the trade was an odd ratio diagonal spread looking for XOP to be around $49 at that first expiration. The more likely explanation is that the September contracts were sold and the trader rolled the position down and out while reducing its size.

XOP fell 0.81 percent to $53.65 in morning trading. The fund has been outperforming the broader market in the last two months as investors flocked to energy stocks, but it's still well below its 52-week high of $61.82 in mid-March.

More than 146,000 XOP options trade this morning, more than 9 times the daily average. Calls accounted for less than 600 of that volume, according to Depth Charge.

Share this article with your friends


Related Stories

XOP

DRJ: We just saw liquidation at work

October 16, 2014

Jon explains why yesterday's perfect storm was triggered by liquidation, which occurs when hedge funds, institutional traders, and retail investors get over-extended and into margin trouble.

XOP

Oil-gas fund faces downside play

October 6, 2014

The SPDR S&P 500 Oil & Gas Exploration & Production Fund is down more than 13 percent in the last month, and traders are positioning for more losses.

Premium Services

Free Webinars

Make Money in a Volatile Market

Education & Strategy

Vexed by the VIX

Many people probably don't know that the calculation changed for the CBOE Volatility Index this week, but it's worth discussing...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER