The SPDR Metals & Mining Fund has fallen to its lowest levels since hitting a 52-week low in October, but its big option trade today is looking for a floor.
A trader sold 4,000 December 40 XME puts for the bid price of $3.35, according to optionMONSTER's systems. The previous open interest was just 4 contracts, so this is a new position.
The put selling is a bet that the exchange-traded fund will hold up above that $40 level through the end of the year, at which time the trader would then get to keep the credit as profit. But the position also shows a willingness to buy the stock if assigned, which could happen any day before expiration but is only likely if they are deeply in the money. (See our Education section)
The XME is down another 2.43 percent to $44.51 this morning. The fund has been trending downward since reaching $57 in early February but has fallen off the cliff since trading above $50 last week.
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