Retail ETF faces downside spread
Chris McKhann | [email protected]
A trader bought 5,000 June 75 puts for $1.20 and sold 10,000 June 73 puts for their bid price of $0.76, according to optionMONSTER's Depth Charge system. This was clearly new positioning, as the open interest at each strike was below 2,000 contracts before the session began.
The trader spent $0.44 to open this vertical spread, which is the maximum potential loss. The maximum gain of $1.56 would be realized if the XRT is below $73 at expiration in mid-June. (See our Education section)
The XRT was up 1.43 percent on Friday to close at $76.45, a record closing and intraday high. The exchange-traded fund was below $73 just the previous Thursday.
Friday's total option volume in the XRT was 53,304, compared to a daily average of 17,000 in the last month.