OptionsHouse

Options Trading News

August 7, 2012  Tue 10:14 AM CT

XOP: SEE CHART GET CHAIN FIND STRATEGIES
The SPDR S&P Oil & Gas Exploration & Production Fund is on pace for its highest close since May 3, but a huge put spread tops today's option action in the name.

The XOP is up 2.5 percent to $52.87. Resistance around $52 has been tested four times in the last month as the stock was range-bound between that level and support at $48. Shares were trading at 2012 lows around $45 in late June.

optionMONSTER's Depth Charge system shows that a trader sold 51,767 September 45 puts for $0.51 against open interest of 55,194 contracts. At the same time, the trader bought the same number of September 49 puts for the ask price of $1.16 in volume that was about 10 times the open interest and clearly a new position.

The trader could be a vertical spread if the activity at the lower strike was opening a new position. That would spend $0.65 to potentially make $3.35 if shares are below that $45 price at expiration.

It is also possible that the trader is rolling the lower-strike put position higher as the stock rises, gaining more delta, or price sensitivity. That could be a directly bearish position or a hedge on long shares of the fund. (See our Education section)
Share this article with your friends


Related Stories

XOP

Huge upside volume in oil, gas fund

April 16, 2015

Energy stocks led the market higher as oil spiked yesterday, partly because of a lower U.S. dollar, and the SPDR S&P Oil & Gas Exploration Fund saw huge volumes in bullish trades.

XOP

Last-minute bulls charge into XPO

April 10, 2015

Late-day call buyers charged into the logistics company, which hit an all-time high in mid-March but then fell with the recent weakness in the transportation sector.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »