OptionsHouse

Options Trading News

February 19, 2013  Tue 1:47 AM CT

XLB: SEE CHART GET CHAIN FIND STRATEGIES
A large call seller is expecting the SPDR Materials Fund to stay trapped in a range.

optionMONSTER systems detected the sale of 24,810 March 40 calls for the bid price of $0.25 on Friday. The volume was almost 3 times higher than the strike's open interest before the session began, clearly showing that this is a new position.

These options were likely sold against long shares in a covered call position, a neutral strategy that is looking for the fund to continue trading sideways in coming weeks. (See our Education section)

The XLB finished Friday down fractionally at $39.35. It has been trading mostly between $39 and $39.70 for more than a month, posting a 52-week intraday high just shy of $40 at the end of January. The 20-day historical volatility for the exchange-traded fund has fallen to a new 52-week low of 10 percent.

More than 37,000 XLB options traded on the day, compared to a daily average of 10,000. 
Share this article with your friends


Related Stories

XLB

Rundown of activity in materials sector

February 10, 2016

Materials have been the strongest sector so far this month. Click here for a list of unusual activity in member stocks since Feb. 1.

OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »