Market News

November 6, 2012  Tue 3:16 AM CT

The SPDR Consumer Staples Fund saw downside option activity as it fell again yesterday.

A trader bought 6,300 March 32 puts for the ask price of $0.39, according to optionMONSTER's Depth Chrage tracking system. Open interest was just 245 contracts at the start of the session, so this is a new opening position.

The XLP was down 0.17 percent yesterday to close at $35.14. The exchange-traded fund reached a high of 52-week high of $36.59 a month ago but has been slipping since. Shares had been in a steady uptrend since last November from a 52-week low just above $30.

The put buying could be an outright bearish position, though shares haven't finished below the $32 strike price since mid-December. The options could also be hedging against long shares looking to protect recent gains. (See our Education section)
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Using puts to BUY stock

Puts are an options contract that gives buyers the right to sell their stock for a set price on or before a future date. However, puts can also be an effective way to BUY stock.

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