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July 18, 2014  Fri 11:14 AM CT

XHB: SEE CHART GET CHAIN FIND STRATEGIES
A large trade is looking shares of the SPDR Homebuilders Fund to stay range-bound in coming months.

A block of 13,300 September 30 puts traded for $0.69 this morning, in the middle of the bid/ask spread, optionMONSTER systems show. This is a new position, as the volume was above the strike's previous open interest of 11,289 contracts.

Exactly a minute later, 492,100 shares of the XHB were sold for $30.82. The combination of stock and options creates on overall delta-neutral strategy that is looking for sideways trading and/or for volatility to be lower than that implied by the put prices. (See our Education section)

The XHB is up 0.88 percent to a session high of $31 in midday trading, following its lowest close since May 21 yesterday. The exchange-traded fund was above $33 at the start of the month.
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Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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