Market News

November 23, 2016  Wed 6:45 AM CT

A large trader is betting that the rally isn't over in the SPDR Financial Fund to rally.

OptionMonster's monitoring program shows that 4,410 December 23 calls were purchased for $0.13 yesterday. At the same second, 4,410 December 21.50 puts were sold for $0.16.

This combination trade is especially bullish because a rally would boost the price of the long calls while decreasing the value of the puts that were sold. But the opposite will occur if the stock drops, and the trader will be on the hook to buy shares if they fall below $21.50 by expiration. (See our Education section)

XLF rose 0.04 percent to $22.25 yesterday and is up 14 percent in the last three months. Overall option volume was about average in the fund, but calls outnumbered puts by a bullish 3-to-1 ratio.

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