Options Trading News

September 21, 2016  Wed 7:16 AM CT


A large trade is positioning for a possible drop in the SPDR Materials Fund.

optionMONSTER's monitoring program shows that 15,000 October 46 puts were sold for $0.63 while 15,000 November 44 puts were purchased for $0.56 yesterday. Volume was below open interest in the October contracts, indicating that a bearish position was rolled forward by a month to a lower strike.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

XLB fell 0.3 percent to $46.69 yesterday and is down 4 percent in the last month.

Overall option volume in the fund was 3 times greater than average yesterday. Puts outnumbered calls by a bearish 247-to-1 ratio.

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