optionMONSTER's Heat Seeker monitoring system detected heavily call buying in the SPDR Technology Fund, whose components include industry heavyweights such as Apple, Google, Intel, and Microsoft. Activity focused on the contracts expiring in three weeks, on Sept. 27, at the Weekly 33 strike. Almost 26,000 contracts traded, most of which priced for $0.07.
Calls lock in the price where shares can be purchased in the fund, a major benchmarks for the sector. It hasn't seen $33 since the first half of 2001 when the dot-com bubble was deflating, so today's trader definitely thinks sentiment is getting better.
XLK is up 1.02 percent to $32.10 in afternoon trading. It lagged the broader S&P 500 in the last year but has started to outperform in recent weeks as investors focus on a stronger global economy and increased telecom spending.
Another potential catalyst is a presentation by AAPL tomorrow, at two new iPhones are expected to be unveiled. AAPL is the largest member of XLK, accounting 15 percent of the portfolio. Our researchLAB market scanner tracks the performance of the fund's components. (See screen shot below)
Total option volume in XLK is triple the daily average so far today, with calls outnumbering puts by a bullish 52-to-1 ratio. The Heat Seeker also showed unusual buying in Intel's December 24 calls as investors look for the semiconductor giant to remain strong into year-end. (See related story)
Disclosure: I own INTC calls.