Sharp move expected in utilities ETF
Chris McKhann | firstname.lastname@example.org
About 15,500 XLU options traded yesterday, nearly twice its daily average in the last month. optionMONSTER systems show that most of the volume was in just one print.
A trader bought 10,000 June 37 puts for the ask price of $0.51. This is clearly a new position, as the volume was twice the open interest in the strike before the trade appeared.
Less than a minute later, a block of 340,000 shares was purchased for $38.14. Given that the delta of the option position is -340,000, the overall trade is almost certainly a directionally neutral play that is looking for higher volatility from a sharp break up or down in the exchange-traded fund. (See our Education section)
The XLU fell 0.5 percent to $38.11 yesterday, a session after its highest close since September 2008. Shares have been running higher since bouncing off support at $34 in November.