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August 1, 2014  Fri 4:45 AM CT

XLE: SEE CHART GET CHAIN FIND STRATEGIES
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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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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