Tech bull chases historic breakout
David Russell | firstname.lastname@example.org
optionMONSTER's Heat Seeker monitoring program detected the sale of 15,000 June 32 calls on the SPDR Technology Fund for $0.62 and the purchase of 25,000 June 33 calls for $0.19. Volume was below open interest in the 32s, indicating that they closed an existing position and rolled it to the higher strike.
The trader collected a credit of $455,000 and still has the potential to make money if the fund keeps climbing through expiration on June 21. He or she also could see more upside leverage because of the increased number of contracts. (See our Education section)
The XLK is up fractionally at $32.22 today but has been lagging the broader market for the last year. The exchange-traded fund recently climbed above its September peak around $31.65 and is now at its highest levels in more than a decade. Now that it's broken long-term resistance, some traders might expect it to continue rallying.
The fund's biggest holdings include Apple, IBM, and Microsoft. Total option volume in the XLK is more than twice the daily average so far, with calls outnumbering puts by more than 50 to 1.