Market News

October 18, 2013  Fri 4:47 AM CT

A large trader is counting on a floor in the Mini S&P 500 Index.

More than 16,000 XSP options changed hands yesterday, compared to a daily average of 2,335 in the last month. Most of the volume was in a last-minute trade just before the close.

optionMONSTER systems show that a trader bought 5,887 October 159 puts for $0.02 against previous open interest of 6,021. At the same time, he or she sold 5,647 December 165 puts for $1.38 in volume far above open interest of just 89 contracts at that strike, indicating new activity.

This is almost certainly the roll of a short-put position, buying back the October puts to take the risk off the table and opening a new trade in December. The bet then becomes that the XSP will remain above that 165 level. (See our Education section)

Like the S&P 500 Index options, these are cash-settled, as there is no single underlying asset. The XSP, which is just one-tenth the size of the SPX, finished the day up 0.68 percent to record-high close of 173.32.
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