Options Trading News

January 28, 2013  Mon 9:47 AM CT

The SPDR Financial Fund is facing a large downside position even as shares trade at multi-year highs.

optionMONSTER systems show that a trader bought 18,500 September 16 puts for the ask price of $0.58 this morning. The volume was more than 10 times the previous open interest, so this is a new position.

The XLF is down 0.4 percent to $17.40, bouncing off the low of the session. The exchange-traded fund hit $17.50 earlier in the session, its highest level since October 2008. Shares were below $16 at the beginning of December.

The put buying isn't tied to any trading in the underlying identified by our systems so far, though it could be a hedge on a previously established long stock position. Alternatively, it could be an outright bet looking for a pullback from these highs. (See our Education section)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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