Options Trading News

February 1, 2013  Fri 9:24 AM CT

The SPDR Industrial Fund is pushing back toward the week's highs, but a large downside trade tops its option action today.

optionMONSTER systems show that volume in the XLI is almost entirely in the June 38 puts. A trader purchased 10,000 of those contracts, led by a big print of 8,520 that went for the ask price of $0.91, against previous open interest of 2,401 contracts.

The put buying isn't tied to any trading in the underlying shares that we can see today. It could be an outright bearish play or a hedge against an existing long position in the fund or the underlying stocks. (See our Education section)

The XLI is up 0.9 percent to $40.43. It closed at $40.59 on Tuesday, which was a five-year high and not far off all-time highs. The fund has run up from support at $35 since mid-November.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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