Options Trading News

March 22, 2013  Fri 11:32 AM CT

Consumer staples are at an all-time high, and traders aren't nervous yet.

optionMONSTER's tracking systems detected heavy put selling in the SPDR Consumer Staples Fund, which focuses on companies such as Procter & Gamble, Phillip Morris International and Coca-Cola.

Some 29,800 contacts have traded in XLP, more than twice the daily average over the last month. The September 37 puts are the busiest, with 21,867 sold for $0.62. Previous open interest was just 37, so this was a new position.

The put selling is a bet that the XLP will hold up above $37 through that September expiration. The trader is also showing the willingness to buy shares if they are below that strike. See our Education Section for more on the strategy.

XLP rose 0.80 percent to $39.25 in early afternoon trading. It has been climbing for all of 2013 after ending last year below $35. Only twice during that time has it closed below its 10-day moving average since, both in the last week.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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