Put trading dominated yesterday's option action in the SPDR Consumer Discretionary Index Fund as it traded close to its all-time high.
The XLY was down fractionally on the day to close at $44.08. The exchange-traded fund bounced off support below $42 at the start of June. Shares ran from a 52-week low of $33.07 to an all-time high of $46.27 on the first day of May.
The fund saw 84,029 change hands yesterday, and all but 3,000 of them were puts. This was about 9 times its daily average.
A trader bought two blocks of 15,000 of the September 42 puts for $1.05 and $1.06 while selling 30,000 September 35 puts for the bid price of $0.22. The volume was well above open interest at both strikes, so this is a new vertical spread.
The spread cost the trader $0.835 to open, which is the most that can be lost if the XLY is above $42 at expiration. The potential gain is $6.165 if shares are below that level, which it hasn't seen since the October lows. (See our Education section)
Options Trading News
Related Stories
XLY
Consumer sentiment leads calendar
May 17, 2013
The University of Michigan's consumer-sentiment index is the main economic report on today's economic calendar. A stronger number would be potentially bullish for equities, while a miss could provoke selling.
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
