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September 21, 2016  Wed 12:04 PM CT

XLF: SEE CHART GET CHAIN FIND STRATEGIES

Traders are bullish on the SPDR Financial Fund ahead of the Federal Reserve's rate decision this afternoon.

optionMONSTER's market scanner shows that some 72,000 October 20 call were purchased for $0.13 to $0.15 today. This represents fresh buying, as volume was more than 22 times the open interest in the strike.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

XLF is up 0.41 percent to $19.40 in afternoon trading and has risen 4 percent in the last three months.

Overall option volume is about average in XLF so far today, but calls outnumber puts by a bullish 33-to-1 ratio.

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