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January 28, 2013  Mon 9:47 AM CT

XLF: SEE CHART GET CHAIN FIND STRATEGIES
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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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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