Options Trading News

October 12, 2016  Wed 7:16 AM CT


The SPDR Technology Fund is facing a large bearish position.

optionMONSTER's monitoring program shows that 10,000 November 46 puts were purchased for $0.49 and $0.50 at the same time yesterday. This is clearly a new position, as open interest in the strike was only 298 contracts before the trade occurred.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

XLK fell 1.13 percent to $47.41 yesterday but is up 7 percent in the last three months. Overall option volume was about average in the fund yesterday, but puts outnumbered calls by a bearish 8-to-1 ratio.

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