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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. 
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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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