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May 21, 2013  Tue 9:15 AM CT

XLP: SEE CHART GET CHAIN FIND STRATEGIES
A large put trade tops the option activity in the SPDR Consumer Staples Fund as it lags the broader market today.

optionMONSTER's Depth Charge system shows that a trader bought 2,000 July 41 puts for $0.16 and sold 4,000 July 38 puts for $0.16. The volume at each strike was more than 10 times the previous open interest, so this was a new position.

The put spread--also known as a ratio because one leg has twice as many contracts as the other--cost $0.34 to open, which is the amount at risk if shares remain above $41. The maximum profit would be realized with the fund at $38, and below that the trader is effectively long shares. (See our Education section)

The XLP is up fractionally today at $41.43. The exchange-traded fund has been trending higher this year after finishing 2012 below $35 but has been slipping since reaching a hit a high of $42.20 last week. 
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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