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November 21, 2012  Wed 10:45 AM CT

XLE: SEE CHART GET CHAIN FIND STRATEGIES
The SPDR Energy Fund is facing a large put trade today as its shares remain in a downtrend.

More than 10,000 December 64 puts have traded against open interest of 2,755 contracts, according to optionMONSTER's systems. The big block of 8,750 was bought for the ask price of $0.22.

The put buying isn't tied to any trading shares of the exchange-traded fund that we saw today, though it could be a hedge against an existing long position in the XLE or its underlying stocks. The long puts could also be an outright bearish bet that the fund will fall below $64, which it hasn't done since June. (See our Education section)

The XLE is up fractionally at $70.41 in midday trading. It bounced off support at $68 at the end of last week but remains in a downtrend from the high above $77 reached two months ago, and it remains below its 20-day moving average.
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Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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