Learn the trade here. Make it on tradeMONSTER

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

Midday index, ETF option volumes

November 4, 2014

Total option volume is light at 5.3 million so far today, with mixed action in the big indexes and ETFs, according to optionMONSTER data systems.

Premium Services

Webinar Playback

eSignal "Back in Black": Multi-Speaker Free Webinar

Education & Strategy

Some things aren't what they seem

As we scan the Heat Seeker, Depth Charge, and other option-tracking systems, we sometimes see heavy activity in calls and...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER