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August 1, 2014  Fri 4:45 AM CT

A huge put roll in the SPDR Energy Fund was the biggest option trade of yesterday's busy session.

optionMONSTER's Depth Charge system shows that a block of 78,000 September 98 puts was sold for $2.80 against previous open interest of 81,366. At the same time, 78,000 October 95 puts were bought for $2.20 in volume well above that strike's open interest of 16,991, clearly a new position.

The trade was done with the XLE at $97.16. The total volume of 181,982 was more than 10 times the daily average for the last month.

This could be a diagonal spread, which would be looking for the XLE to rebound to right around $98 by expiration in mid-September. But it is more likely that the trader is rolling the puts forward by a month to a lower strike as the fund fell in price. The latter could be an outright bearish position or a hedge to protect long stock. (See our Education section)

The XLE fell 2.16 percent to $96.63 yesterday, its lowest close since June 5. The exchange-traded fund was at a high of $101.52 on June 23.
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