Market News

December 28, 2016  Wed 6:17 AM CT

Traders apparently believe that upside potential is limited in the SPDR Utilities Fund.

Our market scanners show that about 9,000 February 47 calls were sold mostly for $2.29 at the same time yesterday. Volume surpassed the strike's open interest of 6,516 contracts, indicating that this is a new position.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

XLU rose 0.08 percent to $48.65 yesterday and is up 5 percent in the last month. Overall option volume in the fund was about average.

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