OptionsHouse

Options Trading News

September 20, 2013  Fri 12:19 PM CT

XLF: SEE CHART GET CHAIN FIND STRATEGIES
The SPDR Financial Fund is seeing enormous put trading today as shares slip from Wednesday's highs.

More than 847,000 XLF options have alrady changed hands today, about 9 times its its daily average--the largest amount I remember seeing in the last four years. Calls make up fewer than 14,000 of that action.

optionMONSTER systems show that a trader bought 191,000 December 20 puts for $0.50, above the listed ask price at the time. At the same time, this trader sold 191,000 December 18 puts were sold for the bid price of $0.12. The result is a new veritcal spread, which cost just $0.38 to open.

In the next minute, large prints of just under 100,000 traded in the October 20, 19, 18, and 17 puts, all with volumes below previous open interest. It appears that the trader is selling put spreads in the October expiration to purchase those in December.

In addition to buying another month for the position to work, the trader also gets a better overall delta and therefore better exposure to any move lower in the XLF. The positioning is likely the work of large institutions hedging hedging their portfolios. (See our Education section)

The exchange-traded fund is down 0.37 percent to $20.45 in afternoon trading, adding to yesterday's losses. On Wednesday the XLF was very near the closing high of $20.87 set on July 22 as it rallied with the rest of the market after the Federal Reserve's announcement that it was not changing monetary policy. Shares were down at support at $19.4 at the end of August.
Share this article with your friends


Related Stories

XLF

Midday index, ETF option volumes

January 23, 2015

Total option volume continues to run above average at 6.2 million so far today, with relatively bearish sentiment in the primary indexes and ETFs, according to optionMONSTER data systems.

XLF

Midday index, ETF option volumes

January 22, 2015

Total option volume is running above average at 6.1 million so far today, with mixed action in the primary indexes and ETFs, optionMONSTER data systems show.

XLF

Huge range trade in financial fund

January 21, 2015

A trader is selling 40,000 June calls against stock, looking for the SPDR Financial Fund to stay trapped in a tight range for the next several months.

XLF

Financial ETF faces downside play

January 5, 2015

Last week's highs were the best levels since June 2008 for SPDR Financial Fund, but the big option trade of the morning is looking at a potential drop by spring.

Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinar

Option Money Machine Winter Classic

Education & Strategy

Rolling in possibilities!

First of all, we want to wish everyone a happy, healthy, and prosperous New Year!  Our plan was to get...

View more education articles »